Anne McGuire: The feedback from many of the small businesses in my constituency, many of which are involved in tourism, shows that there is a lack of knowledge at the local bank branch level about accessing Government schemes. In his discussions with Scottish Government Ministers, will my right hon. Friend emphasise the importance of Scottish Business Gateway and its contractors, and ensure that people understand the Government-backed schemes that are in place and disseminate that information not just to businesses in Stirling, but to small businesses across Scotland?

Jim Murphy: My right hon. Friend raises a point about Stirling and tourism which is specific to her constituency, as she always has done in the House. She is right: we must ensure that the enormous investment in those schemes to support Scottish businesses is accessible and understood, particularly for small businesses. We are trying to encourage businesses to go to the "Real help now" website, where all the information is available. We also need to ensure that the advice through Scottish Enterprise's networks and through UK Government and Scottish Government agencies is readily available, easily understood and deliverable, and we are working very hard on that.

Jim Murphy: Like everyone on this side of the Chamber, I am always sorry when anyone loses their job, and today we are seeing some very difficult unemployment figures for Scotland and the whole of the UK. As we all know, behind those figures there are real people and real families. I am disappointed, as I am sure many Scottish families will be, that, rather than focusing on the real pressures that real families are experiencing, the hon. Gentleman again chooses to participate in the soap opera of the process of politics. People are interested in solutions, not in his soundbites. It is important that we make progress on this matter, and we will do whatever we can to support the newly unemployed, so that they do not become the long-term unemployed.

Tom Clarke: Given the Government's assistance to the banks and my right hon. Friend's discussions with them, particularly those with a Scottish input, is he able to assure us that those banks are indeed looking to develop a strategy to provide lending facilities for small businesses and home owners as the Government intended?

Alan Reid: Will the Secretary of State support the establishment of a post bank, publicly owned, operating in local communities and taking decisions about granting credit to small businesses based on local knowledge rather than a nationwide formula? I believe that that would give many viable small businesses throughout Scotland access to the credit that the larger banks are presently denying them.

Jim Murphy: The Government are always looking for additional ways to support small businesses in communities, and we particularly like to support the community and voluntary sectors and social enterprises. I would be happy to discuss that matter with the hon. Gentleman. It is important, however, to focus on some of the community facilities and support that are already in place, particularly for families rather than for businesses. I believe that the remarkable success and important role of credit unions throughout Scotland is something that we should all celebrate. They will play an important part in the recession.

Jim Murphy: My hon. Friend raises an important point, which I know is particularly relevant in his constituency, as it includes a large number of financial services sector workers. What has happened has, unfortunately, led to the portrayal of all those in the banking sector as being greedy and in receipt of enormous bonuses. As he knows and as we all know, a large number of people working in banks in the back office or as bank tellers, for example, are on very average wages and they work very hard. Some of them may have had share options, which are now more difficult. It is important that we stop demonising all bank workers simply because of the irresponsible behaviour of a tiny minority of those who previously had leading and well paid positions in these organisations.

Jim Murphy: The fact is that the international regulatory regime did not keep pace with a remarkable change in the global movement of finance—a fact now well acknowledged across the world. That is why we need, as part of the G20 process, a new architecture for regulation. Banking will never be and should never be the same again. As for the hon. Gentleman's point on unemployment, we will do everything we possibly can to ameliorate the consequences of this international recession. Many Scottish families have people who have lost their jobs over the past few weeks, as has been confirmed today. As I say, we will do everything we possibly can to stop the newly unemployed from becoming the long-term unemployed by giving people additional skills and retraining in order to retain their confidence and an attachment to the labour market. Of course things are more difficult. Not everyone can walk straight into a job, but we should not ignore anyone, and we should try to support people to keep their skills and confidence fresh.

Anne Moffat: I am sure that the whole House will now want to hear my supplementary question.
	We currently have quite a good level of employment in East Lothian—over 80 per cent.—but I am concerned about the possibility that unemployment levels will rise both in East Lothian and in Scotland more widely. The position could be greatly improved if the banks adopted measures allowing them to enable small businesses to recover by lending them money. Constituent after constituent has said to me recently that they will have to make people unemployed because the banks will not lend to them. The arrogance of the banks beggars belief.

Ann McKechin: My hon. Friend has raised an important point to which the Secretary of State has already referred this morning: the need for banks to start lending in order to enable businesses to survive and to invest. We have introduced the necessary measures to make that possible. I am sure that she welcomed the recent announcement by the Royal Bank of Scotland of the provision of additional funds focused particularly on small and medium-sized enterprises, many of which are based in her constituency.
	It is important to note that the United Kingdom still has the second lowest unemployment levels in the G7 area, but we are not complacent. That is why, from April, we will be providing additional help for those who are unemployed for more than six months, in the form of a £1,000 recruitment subsidy.  [Interruption.]

Jim Murphy: The Scottish Government have more money than ever before. The current Scottish Government have more than double the budget that the late Donald Dewar had when he was First Minister. I think it important for politicians in all parties in Scotland to find additional ways in which to work together through the recession. We are in it together, and we will get out of it together.
	I appeal again to the Scottish National party to stop putting its obsession with the constitution before the priorities of our country, which are to do with economic recovery. Scotland will never forgive any political party that puts its interests before those of our country.

David Cameron: I join the Prime Minister in paying tribute to Corporal Dean John, Corporal Graeme Stiff and Lance Corporal Christopher Harkett. The fact that more than 150 of our servicemen and women have been killed in Afghanistan is a reminder, once again, of the huge sacrifices our armed forces are making on our behalf. We praise their bravery, we honour their memory and we must look after their families.
	Today, as has been said, unemployment has risen to more than 2 million people. The increase in the claimant count is the sharpest rise since records began. Does this not reveal that the claims repeatedly made by the Prime Minister that Britain is one of the best-placed countries in the world to withstand recession were simply nonsense?

David Cameron: We have just had the view from the bunker, where all these scheme are operating and where everything has been implemented, but the fact is that, on the ground, these things are not happening. We get a lecture in competence from a Government who are so incompetent that they could not even stop Fred Goodwin, or, sorry, I should say Sir Fred Goodwin—the Prime Minister knighted him for his services to the banking industry—walking off with a pension that is worth £60,000 a month. The lack of action applies not just to the housing scheme and the job scheme, because the asset-backed securities scheme is not up and running, and the working capital scheme is not working properly. Is that not why the CBI said that this Government have a total lack of a "coherent strategy"? Is that not why Shelter says that people facing repossession have been given "false hope"? Does the Prime Minister regret giving those people false hope?

David Cameron: They all want Lord Myners to negotiate their retirement packages. Call an election and we can arrange that.
	Back to the German Chancellor, who said that
	"if we want to make real impact, you really must implement the package first before you talk about the next step".
	Is not that right? Are not this Government just running round, like headless chickens, with initiative after initiative that never gets implemented? Is not that combination of ineffectiveness and hyperactivity the worst combination of all?

Gordon Brown: May I and Health Secretary first say that we apologise to those people who have suffered as a result of the mistakes that have been made at Stafford hospital? Everybody who uses the national health service has a right, if they put their faith in the NHS at that hospital, to expect the highest standards of treatment. These were not the highest standards of treatment. They have now been investigated, and they fell far short of the standards that people expect. The first thing that we have to do is to assure the families of those who have suffered and relatives who are grieving and who want answers to their questions that there will be independent reviews, if they seek them, of their families' case notes so that they can be assured of what has happened. That is the first thing that we will do.
	The second thing that we have to look at is whether this is a generic problem or a problem at a specific hospital. I am assured by the Healthcare Commission—the chief executive has made a statement today—that there is no equivalent case in all the other NHS hospitals across the country. We should therefore focus on the individual mistakes that were made by management and deal with them. A further inquiry is going on to look at what happened between 2003 and 2005. At the same time, the Care Quality Commission is looking into what lessons we can learn in general from what happened.

David Kidney: After these damaging revelations about Stafford hospital, there are relatives today in turmoil, wanting to know whether their loved ones' deaths at that hospital could have been prevented. I want to press the Prime Minister on what he has just said about reviews. I say that those relatives are entitled to an independent assessment to answer that question for them. Does he agree with that?

Gordon Brown: There are no excuses for what happened in Stafford hospital—no excuses at all. That is why every single relative who asks for it has a right to have the case notes reviewed independently, and to see the notes themselves. That is what will happen. Relatives will have a right, therefore, to take whatever action is necessary as a result of seeing the papers before them.
	At the same time, Mr. George Alberti, who is recognised as being a very pre-eminent surgeon, is going to go to the hospital to look at the progress that has been made, and which has been reported by the Healthcare Commission already. He will ensure that, in future, patients at Stafford hospital will have the assurance of the highest standards. The chief executive and the chairman of the trust have been removed. There is a new chief executive who will look at disciplinary procedures wherever they are necessary. We have got to do everything to assure people that they can have the trust that we know that everybody wants to have in the national health service and in every hospital in the country.

William Cash: What the Prime Minister just said about the hospital in Stafford simply is not enough. We do need a review of the case notes, but we do not just want a Care Quality Commission review. What we need is a full public inquiry to get to the bottom of the matter. It is not enough simply to deal with the issue in the way that he described. We need to know whether compensation will be payable to the victims, and we need to ensure that the people responsible who are still on the board are sacked, and not simply suspended on pay.

Gordon Brown: I know that the hon. Gentleman's constituency is covered by the hospital as well, so let me reply to him in some detail. First of all, all disciplinary matters are being dealt with at the moment by the new chief executive, who is looking at what has happened in the hospital over these last few years in the light of the Healthcare Commission report. I think that he will agree that first of all, we have a Healthcare Commission report that will be followed up by a review into what happened between 2003 and 2006, and an inquiry by George Alberti about whether the standards that have been raised are actually satisfactory for people in the area. At the same time, the Care Quality Commission will look at the standards of health care overall, and look at whether there is an early warning system that could be better in future for dealing with such problems. Individuals, of course, can bring what cases they wish, but I think that they will welcome the fact that the individual case notes are to be made available to them, and are to be reviewed independently.

Alan Johnson: I apologise on behalf of the Government and the NHS for the pain and anguish caused to so many patients and their families by the appalling standards of care at Stafford hospital, and for the failures highlighted in the report.
	In the course of my statement I will set out the actions that we will take in response to the report, but I want to begin by summarising the events that led to the Healthcare Commission's investigation. The Commission became aware of high mortality rates for specific conditions or operations at the trust during the summer of 2007 through its routine analysis and a statistic known as hospital standardised mortality ratios, more commonly called SMRs, produced by the Dr. Foster research unit, based at Imperial college.
	Whenever the Healthcare Commission is alerted to unusually high mortality rates, it initially asks the trust to provide further information to explain such anomalies. High standardised mortality ratios are not necessarily an indicator of poor clinical performance and nor do they signify that there have been avoidable deaths, but they do act as a screening tool to identify the need for investigation. Further analysis showed that there were consistently high mortality rates for patients admitted as emergencies going back over several years.
	The trust repeatedly dismissed the significance of these statistics, saying that they could be explained by the problem it was having with the recording of data. The accuracy of information coding—that is, the system for cataloguing types of surgical and other interventions—had historically been poor in the trust, and the internal group that the trust itself had set up to consider high mortality rates assumed that they could be explained by coding errors.
	The Healthcare Commission refused to accept this explanation and launched a full-scale investigation in March 2008. In May of that year, following its first visit, the commission asked to see the chief executive and set out its immediate concerns about the poor patient care and inadequate staffing levels that it had observed. Since then, there has been gradual improvement. The Healthcare Commission states in its report that
	"the Trust deserves credit for progress on infection control and for responding positively to the concerns of the Commission."
	On an unannounced visit in February to the accident and emergency department, the Healthcare Commission noted significant improvements. Its visit raised no immediate concerns about the safety of patients admitted to the accident and emergency department.
	However, the failures are stark and they occurred over a substantial period of time. Patients will want to be absolutely certain that the quality of care at Stafford hospital has been radically transformed and, in particular, that the urgent and emergency care is administered safely. I have today, jointly with Monitor, asked Professor George Alberti, the eminent physician and national clinical director for urgent and emergency care, to lead an independent review of the trust's procedures for emergency admissions and treatment and its progress against the recommendations in the report. He will report in five weeks' time and his findings will be published to the House.
	The Healthcare Commission has told me that it is confident that Stafford hospital is an isolated case, and that having looked at other trusts with similarly high standardised mortality ratios, it is reassured that a similar succession of serious lapses in care has not occurred elsewhere.
	The National Quality Board has been set up to look at how organisations work effectively together in patients' best interests. It is composed of representatives of the royal colleges, patient groups, regulatory bodies and clinical experts. I have asked the board to look at how we can ensure that any early signs that something is going wrong are picked up immediately, that the right organisations are alerted and that action is taken quickly.
	The public and the House will want to know how the problems at Mid Staffordshire could have remained undetected for so long. One of the reasons why the Healthcare Commission began its investigation was that after having been initially alerted to the problem in the trust, it became clear that there had been serious failings for some time. The Healthcare Commission's report raises serious concerns about why the primary care trusts and the strategic health authority either failed to spot the problems at the trust or, having spotted them, failed to act.
	I have asked Dr David Colin-Thomé, the national clinical director for primary care, to review the circumstances surrounding the Mid Staffordshire NHS Foundation Trust prior to the Healthcare Commission's investigation to learn lessons about how the primary care trusts and the strategic health authority, within the commissioning and performance management systems that they operate, failed to expose what was happening in this hospital. His recommendations will focus on what commissioners across England—GPs and PCTs—can learn from this case to be sure they are advocating effectively on patients' behalf.
	Our principal concern today must be to reassure the families and friends of patients who have died at Stafford hospital that they will be able to ascertain whether any of the failings detailed in the Healthcare Commission's report contributed in any way to the death of their loved ones. As the Healthcare Commission has said, it is not possible to determine conclusively from any set of statistics whether there were any unavoidable deaths owing to poor standards of care—that can be done only through a case notes review. I can confirm that the new leadership of the trust will respond to every request from those relatives and carry out an independent review of case notes to determine whether or not the care that they or their loved ones received was appropriate.
	The failings at Stafford hospital are inexcusable. I hope that we can close this chapter in the hospital's history by acknowledging and addressing past failings and by ensuring that lessons are learned by government and the NHS at all levels to make sure that these terrible failures are never allowed to happen again.

Andrew Lansley: The House will be grateful to the Secretary of State for his statement and will share with him the apology that he expressed on behalf of the Government and the NHS to all the families and patients adversely affected by the events at Stafford hospital.
	We were all shocked and appalled at the failings in patient care at the hospital. There was a systematic failure in respect of patients receiving emergency care. Triage was done by unqualified receptionists; treatment was carried out by too few, too poorly trained doctors and nurses; there was inadequate staffing in the emergency department and on wards; nurses were poorly trained; patients were pushed out to the wrong wards, where the care that they needed was not available; patients were left in pain; patients were left without food and drink; basic hygiene needs were not met; nil by mouth patients were left for days waiting for operations; cardiac monitors were switched off because the nurses were not trained to use them; there were too few critical care beds; and there was a failure to prevent blood clots that went on to kill patients.
	A number of things were lacking in the Secretary of State's statement. I say first that it would have been better for him to have acknowledged the role played by Julie Bailey and the Cure the NHS campaign in Staffordshire in calling attention to what had happened at Stafford hospital. As the Healthcare Commission said in its report, when it launched its investigation there was an unprecedented level of response from patients and relatives who wanted to tell its representatives what was happening. That, frankly, is illustrative of the abject failure of the NHS to listen to what patients and relatives were telling it about what was happening at the hospital.
	We do not know how many patients died needlessly, but we do know that the board of the trust did not listen to complaints from patients and their families, or even to the doctors and nurses on the front line at the hospital. The board did not devote its efforts to the quality of care for patients but was obsessed with financial results, organisational change and targets—not with the care and safety of patients.
	Our job is to find out not just what happened, but why it happened—and, by doing so, to ensure that it does not happen again. Clearly, the board of the trust was appointed to this task, but it should not have been simply left to get on with it. What was the primary care trust, which was responsible for commissioning services from the hospital, doing about the situation? The Healthcare Commission report says:
	"Staff from the PCT involved in commissioning told us that they inherited a chaotic situation"—
	following the merger of primary care trusts—
	"with no detailed handover from the previous PCTs...The minutes of the PCT's performance...committee did not reveal any evidence that the PCT was aware of any problems in the quality of service being provided by the acute trust".
	The PCT was concerned with cost and volume, not with quality. I urge the Secretary of State to ensure that a powerful lesson is learned about how commissioning is undertaken across the country.
	The strategic health authority was, until February 2008, responsible for the performance management of the trust. IT saw the mortality data at the same time as the Healthcare Commission, asked what was happening, sent the university of Birmingham to do an academic inquiry and came away, apparently reassured, that it was a matter of coding. Why did it not get to the truth of what was happening? Why was it that a year ago, the chief executive of the trust, who was responsible for what was going on, said:
	"We worked with the Strategic Health Authority and investigated this apparently high mortality rate and concluded that it was due to problems in the way we were recording and coding information about patients. We have, over the last year, employed more clinical coding experts"?
	He employed not doctors or nurses, but clinical coding experts. Why did the strategic health authority have the wool pulled over its eyes? Given that the then chief executive of that SHA, Cynthia Bower, has since been appointed by the Secretary of State to be chief executive of the Care Quality Commission, which will take over the Healthcare Commission's responsibilities in two weeks' time, is the Secretary of State confident that the CQC will intervene where necessary in future, and that it will be effective when it does so?
	When the Secretary of State passed to Monitor the application for this trust to be a foundation trust in the summer of 2007, one of his jobs was to assure himself that there was a good quality of care. Did he simply tick a box called "They've met the four-hour target in A and E" or was there any additional evidence? It should have been his job to know that the Healthcare Commission had initiated an investigation into the trust. Even if the Healthcare Commission did not tell Monitor, it was his job to do so, and there is an admission in the Department of Health documents that that should be part of the process.
	When the Healthcare Commission carried out its investigation, and wrote on 23 May 2008 requiring urgent action by the chief executive at the Stafford hospital, what did the Secretary of State and Monitor do about it? Why did they not intervene at that moment to remove the board and put in new management? It has taken us 10 months to arrive at that point. It was not simply the case that the events in question were historical, and that everything had been solved by then. The report of the Healthcare Commission says:
	"As late as September 2008, we found unacceptable examples of assessment and management of patients."
	The problems persisted and the board carried on. It is still in denial, and when Mr. Martin Yeates, the chief executive resigned, he said, among other things:
	"I am very proud of what we have achieved so far."
	The public in Staffordshire had a right to know what was going on, and the chief executive of their trust never told them what was happening.
	After Maidstone and Tunbridge Wells, the Secretary of State came to the House on 15 October 2007 and said:
	"we should be spotting these issues much earlier and getting rid of incompetent chief executives or chairpersons who, fortunately, are in the minority, rather than waiting for a report such as this, by which time, frankly, most of the damage has been done."—[ Official Report, 15 October 2007; Vol. 464, c. 571.]
	Where is there any evidence of early and effective intervention by the Secretary of State, his Department, the strategic health authority, which acts on his behalf, or the primary care trust, which also acts on his behalf? Why did that not happen?
	Will the Secretary of State acknowledge that constant organisational change, loss of financial control and an obsession with narrow process targets also contributed to the failure of this hospital, as they have in so many other places before, such as Maidstone and Tunbridge Wells and Stoke Mandeville? There is a systematic problem here. Will he ask the National Quality Board to look at the structure of targets so that it delivers on performance management and continuous improvement without the distortion of clinical priorities and clinical decision making, which has followed on from the application of the four-hour A and E target?
	Moving from targets to outcomes, devolving decisions to the front line, giving real information and choice to patients, listening to patients, and holding hospitals to account for their performance through competition are not just the policy changes needed; they are the essence of an NHS that does not just respond to tick-box, top-down targets, but responds to the real need of patients. Learning from what has gone wrong is the essence of understanding how to improve it in the future. When will the Government learn that lesson?

Alan Johnson: The hon. Gentleman makes a number of valid points, and one that I do not consider valid, which I will come on to.
	The hon. Gentleman's point about Julie Bailey and the Cure the NHS campaign was absolutely right. Indeed, I said in my statement that patients and staff raised concerns over a long period, and we can look at the number of complaints that went through the process. Let us remember that before the early part of this century, there was no independent regulator and no proper complaints procedure. A complaint would only have ended up in the trust—there was nowhere for it to go after that, and there were no statistics. Accident and emergency was a data-free zone. We can go back only about as far as 2001 to get any real indication of what happened.
	What we know is that in the three years 2005-06 to 2008-09, there were 43 complaints by patients at the hospital. That is not unusual, incidentally. What is unusual is that 32 of those complaints were upheld at the level of the Healthcare Commission, which is where complaints now go beyond the local trust.  [Interruption.] The hon. Member for Eddisbury (Mr. O'Brien) says that we have just stopped that. We can debate those issues, but it is very important to talk about what happened at Stafford. The hon. Member for South Cambridgeshire (Mr. Lansley) said that we have to know how this happened. He made a valid point about patient organisations including Cure the NHS.
	As for why it happened, the hon. Gentleman made a valid point about the primary care trust. Actually, we have to put that in the plural—it was primary care trusts at the beginning. I believe that there were two or three before the reorganisation. Now there is one, but previously there were a number. The reason why I am asking David Colin-Thomé to look at that as far back as 2002 is precisely that we need to know what the primary care trusts were doing. We need to know why the strategic health authority, too, was not picking up on the problem on behalf of its patients. That is a central feature of what the SHA and PCTs are meant to do as commissioners.
	All that we know—the hon. Gentleman will have seen this in the Healthcare Commission's report—is that there is a turgid argument about coding errors. It was pointed out by the Commission for Health Improvement in 2002, when it examined Stafford as part of a rolling programme of looking at every hospital in the country, that the system of collecting data was poor. That then seems to have become the major reason why no one would examine what was actually happening to patients and patient care. The SHA commissioned Birmingham university to produce a report, which once again seemed to suggest that the problem was all about coding errors. We should pay tribute to the Healthcare Commission, which, having listened to that over and over again, refused to accept it and actually went in to see what was happening in the hospital.
	I do have confidence in the Care Quality Commission, not least because this House has given it greater powers than the Healthcare Commission has. Looking at what happened at Stafford, although no one knew it when we were debating the matter, there is no better argument for why those registration and other powers are so important.
	The hon. Gentleman asked when the information was passed to Ministers, and he made a point about how the Healthcare Commission could have tackled the problem much earlier. This was approved in the Department before I arrived— [Interruption.] Well, he asked me when I approved it, so I am just answering that I did not approve it; it happened before.
	The simple fact is that the approval was for a system that looked to the future. The consideration was whether the board had a strategy for the future—the hospital had a three-star rating from the Commission for Health Improvement—and whether it was capable of carrying it out. At that time, in June 2007, there was no indication of a Healthcare Commission inquiry. Indeed, the commission itself was alerted by the Dr. Foster figures in the summer and autumn of 2007.
	As far as the question about what the commission did is concerned, when it went in in May 2008 it had the ability, which Parliament had given it, to put that hospital into special measures immediately. That is the commission's decision, not ours. It is an independent regulator's decision to do that. What the commission did—I think it was the right thing to do—was not wait for 18 months until it had produced a report but immediately call the chief executive to a meeting and say, "There are serious concerns." Obviously it had to produce a report with recommendations, but it said that those concerns had to be tackled immediately. It states in its report that the trust did start to tackle those issues, although the hon. Gentleman is absolutely right to say that we have to be confident that there is not still a state of denial in the trust. I am still not confident about that, for some of the reasons that he gave. That is why I have asked George Alberti to go immediately and produce a report in five weeks.
	Where I take issue with the hon. Gentleman—I hope that Members of all parties will not use this turgid argument—is the idea that somehow this is to do with targets.

Norman Lamb: I thank the Secretary of State for early sight of the statement.
	We all recognise the full horror of what has been uncovered in the report—the gross neglect of patients and many dreadful and inhumane examples of poor treatment. Conditions were described by one relative as being reminiscent of the workhouse, which is a shocking comparison to make. There has clearly been an absolute dereliction of the duty of care, which should shock us all. Stafford is not a private hospital, for which we can all blame uncaring shareholders. This is the NHS, and that is what makes it so utterly shocking.
	I, too, pay tribute to the relatives who refused to be fobbed off and kept battling away, trying to get justice for their loved ones. It is the Government's absolute responsibility to ensure that we eradicate that sort of experience from the NHS. It must never happen again. In saying that, I am conscious that it was not that long ago that we considered the abject neglect that was found in Maidstone hospital. There are therefore repeated examples of those concerns.
	I hope that the Secretary of State will not only focus—rightly—on the culpability of those at the hospital, but face up to the possible wider causes and failures that led to the shocking scandal. So far, we have received an apology from him and the Government only for the failure of others. It is a strictly limited apology and further investigation is required.
	The Secretary of State has announced several specific steps that he wants to take, but will he agree to relatives' demands for a full, independent public inquiry into all the possible causes of the scandal and the vital lessons to be learned? Such an inquiry should consider the following matters. First, it should examine the need for justice for patients and relatives who have suffered so much. Secondly, it should consider the rigid operation of the four-hour target and the bullying that too often surrounds it—when one goes to hospitals and talks to emergency care practitioners, one hears that that plays a part. Doctors are told to divert from important care to treat people who are close to the four-hour target, and nurses have been threatened with the sack if the four-hour target is breached. It is extraordinary that the statement did not mention the four-hour target, given that the report refers to it.
	It beggars belief that the hospital was a three-star hospital, which secured foundation trust status while all that we have heard was going on. Is that not reminiscent of Haringey council, with its three-star status as the baby p tragedy unfolded? Surely we need a review of the way in which hospitals are assessed in the light of the events. Although managers are rightly in the firing line, what about the clinicians working in emergency care? Clearly, there was appalling understaffing, but did anyone speak out? Should any clinicians be held accountable for what happened? Has anyone left the trust? Has anyone gone through internal procedures? Those questions need answers.
	We should also consider the role of the coroner, who failed to provide information about inquests, which would have been helpful. Surely that obstructed the investigation. What about the crucial role of the primary care trust and the strategic health authority? How on earth did matters go on for so long? The high mortality rate dates back to 2003—five full years—before anything was investigated.
	What of the role of Cynthia Bower? She was chief executive of the strategic health authority and she is becoming head of the Care Quality Commission. What about her predecessor, who is now chief executive of the NHS? Is there a conflict of interest—

Mr. Speaker: Order. Obviously, Front-Bench spokesmen get an allocation, but the hon. Gentleman has spoken for four minutes and I must consider Back Benchers and also the fact that there is an Opposition day debate today. If the hon. Gentleman is about to wind up, that is fine, but he is taking liberties at the moment.

Alan Johnson: I think that the hon. Gentleman is wrong to call for a public inquiry. We have a very good Healthcare Commission report, which underlines the difference between what has happened and the Bristol royal infirmary inquiry, which considered the position between 1984 and 1995, when there was no commissioner or independent regulator. There was no one to go in and examine the matter and no information. Now, the Healthcare Commission has provided an excellent report. We need to do more—that is why I said that events from 2002 to 2005 need to be examined. We need to be reassured that things are happening now. There needs to be an independent review of case notes and the National Quality Board needs to examine the alerts.
	The next stage review, which Lord Ara Darzi leads, appears esoteric in many ways, because it refers to each board having to produce a quality account as well as a financial account and it mentions quality metrics. It is not the stuff that gets people excited, but it is right. When we consider what happened at Stafford, we must move even further. Bruce Keogh, the medical director of the NHS and an eminent cardio-thoracic surgeon, said that there is a
	"moral, professional and social responsibility"
	on everyone in the NHS to know
	"what they are doing and how well they are doing it".
	That did not exist previously. The hon. Gentleman spoke about Maidstone, but there was no ability to have such reports previously. The Healthcare Commission's approach has done us proud, and I therefore do not believe that there is a need for a public inquiry.
	On what is happening in the trust and whether there is an issue about people on the board or clinicians, I stress that the board, which is now led by a new chair and a new chief executive and has a new clinical director, received the report officially only today. They must now go through due process. I want people to be treated fairly, with due process. The board will consider the report today and decide whether it needs to use internal procedures in the way that the hon. Gentleman suggests.

William Cash: I understand that, Mr. Speaker, but these are hugely important questions. Bringing all those matters together in one public inquiry, as we did in different circumstances back in 1984, with legionnaires' disease in the same hospital, should be very carefully considered. I strongly urge that we do that, otherwise we may miss the wood for the trees. May I say finally that—

Alan Johnson: I agree with my right hon. Friend on all those points. One reason why standards have improved so dramatically is that we have proper measuring and independent regulation and we have set standards. The targets become standards as soon as they are achieved, and they have indeed been achieved. I also agree with the point about drawing to the attention of the regulator any information that emerges from the case notes review.

Alan Johnson: My hon. Friend raises an important point, which is central to the issue that we are discussing. I do not think that Bill Moyes or Monitor could have made any other decision. Let us not forget that the decision on Stafford was made before the Healthcare Commission decided that it needed to investigate. Yes, there were issues to do with the high standardised mortality ratio, but there are such issues in many hospitals. Once the Healthcare Commission decided formally to investigate on 18 March 2008, the hospital already had foundation trust status. Why did Monitor do that? Because the system looks at whether there is a proper strategy to implement.
	There are lessons for everyone to learn, but I will tell the House what Bill Moyes said last night:
	"we have certainly learned since our assessment of Mid Staffordshire that we need to look wider than we did at the time. At the time we tended to rely on other bodies to bring us information, whereas now we look at a whole range of issues about quality, including things like complaints".
	Apparently that was not previously in the system. We all need to learn from what has happened. I am not saying that Monitor or anyone else—and certainly not the Government—does not have lessons to learn, but the 115 foundation trust hospitals that have managed to achieve that status, to which many others aspire, are a world away from the awful events that were happening in Stafford.

George Osborne: I beg to move,
	That this House condemns the fact that, nine months into a recession, Government policy is failing to tackle the deepening economic crisis; notes that the measures announced months ago, including the Working Capital Scheme, the National Internships Scheme, the Asset-Backed Securities Guarantee Scheme, the Homeowners Mortgage Support Scheme, the car manufacturers' finance guarantee and the Recruitment Subsidies Scheme, have not yet been implemented; questions whether there is any evidence at all that the temporary cut in value added tax has succeeded; notes with concern that the value added tax cut has added to a rapidly deteriorating fiscal position, and that Government debt is likely to double by 2013; calls on the Government once again to implement what was promised, to get credit moving by introducing a National Loan Guarantee Scheme, to take tax measures in order to help savers and to take other measures to help small businesses; and further calls on the Government to start addressing the long-term causes of the current crisis, including a build-up of government, corporate and personal debt which has left the UK more exposed than other countries, and to develop the required long-term reforms of the tax system, the failed tripartite system of regulation, and the public sector, so that in future Britain lives within its means.
	As we heard during Prime Minister's Question Time today, we have just seen the fastest monthly rise in unemployment on record, worse than any monthly figure during the 1980s or the 1990s. Vacancies are at a record low—which used to be the Government's excuse on days such as this—while 2 million people are out of work, and of course the numbers climb steadily. We have also learnt today that the International Monetary Fund has produced new growth forecasts for the world, which show that Britain is set to be in recession for longer than any other major economic area. Indeed, the IMF predicts that the British economy will be the only major economy to contract next year, 2010, when the economies of America, the eurozone and Japan are all forecast to be growing again.
	As my right hon. Friend the Member for Haltemprice and Howden (David Davis) has just said, Lord Turner has published his report— [Interruption.] I was sent a copy in advance, so I did not need to go to the Vote Office. However, it says something about co-ordination in the tripartite committee that the Committee could not convey the report to other Members.

Michael Howard: Will the hon. Gentleman give way?

George Osborne: Of course.

Doug Henderson: Setting aside the political rhetoric— [Interruption.] I think we have heard a lot of that today. Setting aside the political rhetoric, does the Conservative party accept that as part of any fiscal stimulus internationally, it is inevitable in this country as in other G20 countries that both debt and borrowing will be a higher percentage of GDP, rising in every advanced country above the 3 per cent.? If the Conservatives do accept that, what is their strategy for tackling Britain's position?

George Osborne: I will give way after I have got through this section of my speech.  [Interruption.] This is about the hon. Gentleman's constituents—it is about the many thousands of people in all our constituencies who are losing their jobs. Businesses are going bust because Government schemes that were promised have not been implemented.
	Let us look at the working capital scheme—no doubt the hon. Gentleman was among the loudest cheerers when it was announced from the Dispatch Box. It was proposed on 14 January and launched in a blaze of publicity. The Business Secretary said at the time:
	"There will be real results from the schemes that go live today."
	Two months later, that scheme does not exist. The date when it was supposed to be up and running came and went weeks ago. The negotiations with the banks are still continuing, and in the meantime good businesses are going bust and good people are losing their jobs.
	That is not an isolated example of the incompetence of this Government. The automotive assistance programme is supposed to help the car industry. Two months after it was launched, there is no evidence yet that a single car manufacturer has been helped. Earlier this week, the Department for Business, Enterprise and Regulatory Reform floated the idea of a car scrappage scheme. Today, the Treasury is briefing the media that it is not in favour of the scheme. That one did not even last a week. My hon. Friends will recall that the home owners mortgage support scheme was announced by the Prime Minister in the Queen's Speech debate, yet we are now in March and that scheme does not exist; the number of repossessions is rising, thousands are losing their homes and not a single home owner has received support. What about the national internship scheme, which was announced three months ago? I can find no record of that scheme anywhere—it has completely disappeared without trace. Perhaps the Chief Secretary to the Treasury could tell us what has happened. Ministers cannot distinguish between getting a headline on the "Today" programme and actually making sure that the schemes they promise are implemented and are working, but the public can and this is causing widespread disillusion and despair.

Rob Marris: rose—

George Osborne: I shall give way to the hon. Gentleman.

Rob Marris: The very end of the Opposition motion refers to the country living "within its means", and that has an impact in terms of savings. At the moment, there is a 10 per cent. return from the capital rule for savers who are pensioners in terms of benefits. Many of us think that that 10 per cent. is unrealistic now. If the shadow Chancellor agrees, would he indicate the level to which he thinks that percentage ought to come down?

Geoffrey Robinson: On the hon. Gentleman's £50 billion loan scheme, would it count as Government expenditure? If it would, it would add massively to borrowing, and he has to accept that. Who would administer this scheme by which he is so mesmerised? At one point, the Tories suggested a new Government quango, but without much conviction. Most importantly, would he seek any security for loans made under this phantom scheme that he has invented and thrown up for general discussion without a single convincing element to lend it credibility? Would he require security, or would it be a question of everybody having what they want?

George Osborne: I get the point. The scheme would be of the same nature as the guarantees we offer for interbank lending, and would be scored in the same way. Of course there would be a contingent liability, but it would not add to public borrowing. The scheme would be administered by the banks, because they have the commercial judgment— [ Interruption. ] I do not suggest that the Government should engage directly in making loans to small and medium businesses, or even large ones. The banks can do that with the support of the Government and the guarantees provided by the Government— [ Interruption. ] I do not know why Labour Members are so surprised. This is the scheme that the Government are supposed to be setting up, but it has not actually happened yet. Of course, like with a good commercial loan, there would be collateral, but the point is that businesses cannot get commercial loans and there is no credit flowing in the economy, because of the credit crunch.
	The Government cannot engage in any of the debates about making good the mistakes of the past or learning the lessons about what went wrong because they are led by a man who thinks that no mistakes at all were made. He thinks that there were no mistakes in the system of regulation, in the wanton destruction of savings and pensions, or in allowing an economy to be built on debt.

Yvette Cooper: I am glad to know that the right hon. Gentleman concentrates so hard with his eyes closed and his shoulders shrugging. I was asked about the asset protection scheme that we have set out the great details of and put into place. I was also asked about the recapitalisation that took place earlier in the year. In exchange for those, we have lending agreements that have been signed up to by the major banks. For RBS, the agreement is worth £25 billion of additional lending and for Lloyds, it is worth £4 billion of additional lending. The right hon. Gentleman will recognise that we cannot get banks lending if they do not stand up in the first place. That is why it was so important to prevent the banks from going under earlier this year.

Robert Smith: One of the success stories of the UK economy has been the north sea oil and gas industry, which has more than 500,000 jobs, has provided a third of corporation tax revenues this year and makes a contribution to the security of our energy supply. The big challenge is that the new companies that have been driving the exploration were reliant on the lending from the banks that has dried up and has still not come back. One proposal from the industry, which we should look constructively at, is to bring forward the tax relief that it receives on exploration so that it is payable up front to encourage more cash flow and to get the industry investing again. That would keep the industry going through this trough so that it is there when the economy picks up.

Yvette Cooper: The hon. Gentleman is right to say it is important to support consumer confidence. We have to do more to put more money in people's pockets at a difficult time and to help to support the economy in different ways. That is the approach that we are taking, through both monetary and fiscal policy. Sadly, it is not supported by his party.
	Let us go through this. The Conservative party is the only party in Europe that refuses to back extra Government fiscal action to help our economy. Yesterday, the Governor of the Bank of England said that we need
	"a growth of nominal demand sufficient to reverse the extraordinarily steep and simultaneous downturn in output around the world."
	That means using monetary policy to boost the economy. As a result of the legal framework that we set out for the Bank of England in 1997, it has a duty to prevent deflation as well as inflation. That is why it has cut interest rates significantly, and that has put hundreds of pounds a month back into the pockets of mortgage holders. With the support of the Government, the bank is now using £75 billion to increase the money supply by buying further assets in the market. That is already having an impact on the markets.

Yvette Cooper: The hon. Gentleman is simply wrong. In fact, I am very concerned about the lack of credit for important and viable businesses, and that is why we are taking a series of steps and measures to try to support them and help them to get the credit they need. However, I remind him that the credit crunch is global, and that there has been a reduction of £100 billion in the lending in this country by foreign financial institutions. Near my constituency, for example, an important development for the area has been jeopardised because the Anglo Irish bank has pulled out.
	Right across the country, there has been a reduction in lending as a result of the credit squeeze and of the fact that banks are no longer lending to each other. What do we need to do? We need to get banks lending again, and we are taking a series of measures to do that.
	The first such measure, obviously, was to make sure that the banks were still standing. Without banks, there can be no bank lending. Our recapitalisation of the banks in October was critically important to keeping them lending. The Opposition supported that at the time, but they have prevaricated over the matter since then. They have made it clear that perhaps they no longer support what I believe was a hugely important measure to support our economy's financial stability.
	The second measure was to make sure that the banks were strong enough to withstand what is now a global recession. We had to be certain that they were strong enough to deal with their capital and liquidity problems, and with their toxic and problem assets. For that reason, we have put in place the asset protection scheme, which has very clear and binding lending agreements. As a result, banks are now pledged to deliver more lending to businesses and mortgage holders in the coming financial year than they did in the preceding year.
	We need to monitor those lending agreements to make sure that the money gets out to businesses, in the constituency of the hon. Member for Billericay (Mr. Baron) and across the country. They need that money, as does our economy.

Yvette Cooper: The hon. Gentleman asks an important question, and I shall give him some examples. It is clear that we need to be able to make sure that the lending is getting through, but we must also recognise that the scale of the withdrawal of credit by foreign institutions in this country means we must do a huge amount of work on a range of different fronts. That is why it is important to look beyond bank lending and lending to business to find other ways of supporting demand in the economy through this difficult time. I know he would agree with that.
	The hon. Member for Eastleigh asked for details of some of the specific schemes. For example, additional funding from the European Investment Bank of over £300 million was announced for small and medium-sized enterprises was announced in November's pre-Budget report. That has now been approved, while the enterprise finance guarantee scheme is in the middle of processing 400 loans, worth over £40 million, to businesses that otherwise would not be able to access funding. The commitments made as a result of the asset protection scheme amount to £25 billion from Royal Bank of Scotland and £14 billion from Lloyds. That is in addition to the further lending that Northern Rock has committed to.
	One of the most important schemes that we have put in place is the one that allows businesses to defer taxation. So far, 90,000 businesses have taken the opportunity to defer £1.5 billion and have been able to get additional support as a result.

Yvette Cooper: —the Conservatives report, which called for an end to mortgage regulation just a month before the credit crunch began. That is shocking, at a time when we need to increase regulation. The Conservatives have continued to oppose the tougher regulation that we need, and they have opposed the action and the investment that we need to get our economy through difficult times.
	We have a fundamental difference in philosophy. We believe in internationalism and in working with our international partners in Europe, in the US and across the world. The Conservatives would pull out of Europe and would be isolated in their economic strategy. We believe that when markets fail, it is right for the Government to step in, support people and help them through. They believe in rolling back the state and cutting help for people. Only a few months ago, they were saying they wanted a Government who got off people's backs. What they meant was a Government who turn their back.

Madam Deputy Speaker: Order. It is entirely dependent on the Minister who is speaking whether she gives way. She has made it clear that at this point she is not giving way.

Vincent Cable: That totally ignores the other side of the balance sheet. The banks will have to be, and should be, reprivatised in—I do not know—about eight or 10 years' time. As the right hon. Gentleman knows perfectly well, when they are, all those assets will be realised. So the debt liability is completely different from the debt accrued as a result of previous deficits. The right hon. Gentleman, who is probably one of the most financially sophisticated people in the House, should surely realise that distinction.
	The obsession with the legacy of debt seems to be inhibiting Conservative Front Benchers in taking what seems to me to be simply a realistic view about the need for a fiscal stimulus. The view that they take—that one should not have a fiscal stimulus over and above the automatic stabilisers—is so extreme. I do not think that any other country in the developed world now takes that view. I managed to unearth only two from the International Monetary Fund: the first is Argentina, which is in the middle of a financial crisis, and the second is Switzerland, which is not allowed to have a fiscal stimulus for constitutional reasons. The Conservatives are arguing for a policy of complete abstinence when it comes to additional fiscal stimulus. That seems utterly wrong during a crisis of this kind.
	Most of the burden of fighting the recession is being carried by monetary policy. That is absolutely right; we are seeing the implementation of the ideas that Mrs. Thatcher, as she then was, brought in with Professor Walters and the others—of concentrating on interest rate cuts, expanding money supply and letting the exchange rate float. Fundamentally, that is how the British economy is being driven and that is right. However, it seems entirely sensible to put on top of that a modest fiscal stimulus, and I do not understand why the Conservatives have locked themselves into a completely reactionary position.
	The fiscal stimulus is small—less than 1 per cent. of GDP—and the Conservative party is completely unique among parties in the developed countries of the world. Moreover, its position is blinding the party to the real criticism. The proper criticism was tellingly made by the hon. Member for Uxbridge (Mr. Randall) from his standpoint as a business person: it was that the value added tax cut was entirely the wrong way to do it. The Chief Secretary to the Treasury has tried to give a defence of it, but I do not think anybody believes it. It would have been much better to have used the money in targeted public investment. Everybody can make up their own list, but we, for example, argued for social housing, home insulation programmes and public transport—things that could be mobilised quickly. At the end of that investment, we would have had an asset. That would have been a better approach. It is much better to criticise the Government from the standpoint that the VAT cut was a wasteful, foolish way of giving a stimulus than to say that we should not have any kind of fiscal stimulus at all. That is the dividing line.

Michael Howard: Before the hon. Gentleman indulges in a further orgy of self-congratulation, will he concede that, contrary to what he just said—and as I shall demonstrate with chapter and verse if I am lucky enough catch your eye, Madam Deputy Speaker—my party did warn about the transfer of responsibility for supervising the banking system from the Bank of England to the Financial Services Authority?

Geoffrey Robinson: What a pleasure it always is to follow the hon. Member for Twickenham (Dr. Cable). In a previous debate on a similar topic, I complimented him on his prescience on these matters, which as we have seen today is matched only by his omniscience. I compliment him also on the national reputation for both that he has built up. If he has been so consistently right throughout these difficult times, it can only be for the wrong reasons in some cases. That, of course, is the cardinal sin. Whatever the details of the past, it is not worth going into them today. I do not even want to get into whether the situation started in America or here, because no doubt that will be a matter for historians. For the moment, the point is surely what we are going to do to confront the biggest crisis for 100 years or perhaps longer.
	The House has done itself good service in its discussion of debt in this debate. It might have been a bit too technical, but underneath it is the fundamental point that we must consider: how serious are the debt levels that we have built up? Although debt will increase as a percentage of gross domestic product, all the best forecasts that I have seen are still projecting that when we are out of the recession in 2011 or 2012, we shall have a considerably lower debt as a percentage of GDP than Japan. The figure is out of all proportion there at more than 100 per cent., which is where we were under Supermac. I believe that the figure here will be less than that of the Germans and probably the United States as well. As a percentage of GDP, the figure is not so terribly frightening.
	I take the point, however, that everybody has made about debt. The Chancellor. spelled it out with great courage and good sense when he said that we would have to correct the deficit in the medium term, because it would not be sustainable for the level of debt to continue climbing during the recession. He said that it would not be tenable for the country to get into that level of debt.
	The Tories have tabled a motion stating that we have to deliver on the promises that we have made, every single one of which they opposed—from Northern Rock and the reconstruction of the banks to the fiscal stimulus. The cheek of it is quite unbelievable. The Conservative party must reconsider its untenable position of now supporting the Government's policy and condemning them for not delivering it, and at the same time saying that it is not working. I do agree that there has been some delay in getting those measures into the marketplace.

Laura Moffatt: I am very grateful to the hon. Gentleman for that intervention, because it gives me another opportunity to say not only that Business Link can go in and advise on issues to do with debt, but that other organisations, such as the Institute of Directors, are very clear that, for a healthy business, not building up debt to begin with is the right way to go. Having an enormous amount of debt and then having to defer further payments is a difficult position to be in, but we need to have these devices in place to allow businesses to plan for difficult times. That is exactly what we should be doing: giving this direct help to our businesses in our towns, cities and rural communities.
	A lot more needs to be happening, too. To deny that and say that public expenditure should be cut is a travesty of justice in respect of what is happening in many of our communities. Members always campaign for investment in their constituencies, of course, but if we do not make that investment at this important time, we will be creating tremendous difficulties for ourselves. Not investing in public services and cutting public investment would choke off many of the fantastic initiatives that are going ahead.
	I was listening to an Opposition Member saying that the proposed redevelopment of his college is not going forward. Well, that is not true of Central Sussex college in Crawley. We have an enormous proposal coming forward; it is planned work. It is an excellent college: it has just had a fantastic Ofsted inspection and is now rated as "good". In particular, the inspectors say that it is preparing people for the workplace—it is giving young people the ability to do the jobs that are needed so that they are in a position to feed our economy.

Laura Moffatt: I am explaining that I know that my college—Central Sussex in Crawley—is going ahead with such work.  [Interruption.] My hon. Friend the Member for Northampton, North (Ms Keeble) says that that is also the case in Northampton. Frankly, the hon. Gentleman's comments do not do justice to the principals, such as Dr. Russell Strutt at Central Sussex college. The college covers the constituency of the hon. Member for Mid-Sussex (Mr. Soames), among many others, and it is moving forward with its investment. This is not just about my constituency, and the comments made by the hon. Member for Runnymede and Weybridge (Mr. Hammond) do not do the college justice.
	The way that businesses can get themselves into a position in which they thrive and thus survive this appalling global recession is by making sure that training is a continuing part of their business. It is at the core of making sure that the work force is able to rise to the occasion when needed. That is why it is so important to see the work being done in Crawley on apprenticeships. A growing number of companies are expanding their apprenticeship programmes to ensure that they are fit for the future. I am proud to say that both of the two producers of linear accelerators in Crawley, Varian and Elekta, have thriving apprenticeship schemes that our young people are desperate to get on because of the quality of the jobs.
	There is plenty that can be happening in our constituencies. I am always the first to say that we need to get more of these initiatives in place more quickly. One of the roles of a Member of Parliament is to ensure that if we have particular concerns, we can get to the heart of government and to our business organisations, in order to assist those in difficulty.
	Local authorities have an important role to play. When issues emerge to do with the delivery of schemes put in place by the Government, it is often because the schemes are being delivered by other institutions. It is difficult to keep a handle on just how institutions such as local authorities are performing and how quickly they are ensuring that all the initiatives are in place. I ask the Minister to ensure that we audit all those organisations—both county councils and borough councils—to see how quickly they are putting in place some of the fantastic schemes available to us.
	It would be very silly to assume that it is just working-class and other families who are suffering in this recession. We have to accept that there are those who are managing businesses who are in some difficulty. I have spoken to people running businesses who are close to tears when they feel that their business is on the edge. It is always really helpful to get Business Link involved to give them help and advice—that has been incredibly useful. When the economy is in difficulty, we need to think about the softer side: how do we support people in difficult times and give them the necessary help and advice? This morning, I spoke to the Rev. Jonathan Baldwin, who is the chaplain at Gatwick airport, and heard about the invaluable support that he is giving to managers and workers at the airport. We need to thank such people in this House, because although this global downturn is causing enormous pain and hardship, there are people out there who are keen to assist in ways for which we will never be able to thank them; we must know that they are in place, working.
	The work of the jobcentres has also been invaluable. I have been visiting them often and keeping an eye on the cases about which I have concern. The jobcentre in Crawley has responded enormously well, particularly to things such as the collapse of Excel Airways. That was a devastating experience in Crawley, but the jobcentre opened its office at the weekend, interviewed Excel Airways people who had lost their jobs in such a horrible way and got them into new jobs as quickly as it possibly could. The staff went much further than we would expect of public servants, and I thank them for the work that they do.
	There are clear dividing lines on this; we are able to discuss the initiatives available to us only because there are initiatives available to us. The proposals described by the hon. Member for Tatton (Mr. Osborne) are worthless with nothing to back them up. I am proud of the work that is being done. It is devastating to see the families affected at this time, but my hon. Friends and I shall work tirelessly to talk up the economy—and the contribution that people make to it—and to ensure that we are on their side.

John Redwood: Let us first of all get rid of some of the nonsensical soundbites that the Government offer in substitute for serious analysis and debate. I am glad that the Government no longer talk of "no more boom and bust". Even they see how absurd that is, but it is disappointing that they still tell us that they made the Bank of England independent. As my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) explained, the Government did grave damage to the Bank of England, which we highlighted at the time and continue to highlight.
	In the report by the group I chaired, which the Govt often misquote, we made a big thing about how the Bank of England was gravely damaged in 1997, which made it very likely that when a crisis struck the Bank would be unable to handle it properly. It was damaged not only by the removal of responsibility for financial regulation of the clearing banks—something that a central bank needs to do so that it knows the day-to-day positions and the true financial state of those banks—but by the removal of the responsibility to manage public debt. Anyone who understands money markets knows that public debt is the life and substance of the money market. The Bank of England was blind and deaf in its own money markets, because it was no longer in daily contact with clearing banks—one side of the equation—and nor was it handling minute by minute the Government debt requirements. No wonder it made an awful mess of the money markets in 2007 and 2008. No wonder it was not sighted in the massive credit explosion that the regulators allowed the banks to perpetrate, and that created this immediate crisis.
	We now have two more soundbites substituting for serious policy and analysis. One is that this is a global crisis, as if in some way that excuses the Government of all responsibility. Their refusal to understand that we have a worse version of the crisis than others is extremely depressing. Their refusal to admit that the global recession is happening for different reasons in different places means that they will find it very difficult to tackle the problem here in Britain. They do not seem to understand that the crisis is very different in Japan, Germany and China—the successful saving and exporting countries—from the crisis in Britain, the US, Ireland and Spain, the over-borrowed, over-extended credit countries.
	The exporting countries merely face the very serious problem that their export markets are temporarily very badly damaged, but they have strong fiscal positions and strong savings, while the heavily borrowed countries have a double crisis. We have the downturn in activity, like the successful exporting countries, but we also have extreme credit crunch problems, meaning that we do not have the financial flexibility to pump up our economies and return to previous levels of activity. The levels of activity reached in 2006 and 2007 were unrealistic, and were sustained on a sea of debt and those funny instruments that were allowed by the Government's regulation.
	The Government now say that the problem was created by deregulators, as if a deregulatory Government had been in charge in Britain for the past 11 years. However, never has more regulation been put on the statute book than in the past 11 years. Every feature of the financial regulatory system that they inherited was taken apart and recreated with far more cost, far more expense, many more regulators and far more complexity. Anything that has gone wrong on their regulatory watch is the result of their style and choice of regulation, and it certainly was not deregulatory.
	What we said in our economic review, which Labour Members love to misquote, was that we needed stronger and tougher regulation of banking cash and capital, and that that had to be done by a reunited Bank of England, which saw all the business and the money markets and understood them. We said that we did not need the new regulation of mortgage process that the Government had introduced. If we needed proof of that, we need only consider that we have had more mortgage process regulation than this country has ever known at the same time as we have had more dodgy mortgages than this country has ever known.
	Mortgage process regulation does not stop credit over-expansion. It does not tackle a credit crunch. I find it very odd that intelligent Ministers cannot understand that point; perhaps they deliberately misconstrue it. It seems so obvious to me that they were regulating the wrong things in the wrong way and that they were not doing what a regulator should do. When businesses can extend credit and lend lots of money to people and companies, we should control their cash and capital to ensure that they are prudent.
	The massive expansion in bank balance sheets should have been ringing alarm bells by 2004-05 in the Treasury and with the Chancellor, let alone in the Financial Services Authority and the Bank of England. It was ringing alarm bells on the Opposition Benches, as we have learned today. I shall not treat the House to loads more quotes or say that we saw all this coming, as that does not matter. What does matter is that the Government did not see it coming. They were not listening, they were not watching and they were not carrying out their prudential activities sensibly and well.
	What should the Government do now? They are making a worse crisis now than the one that they are talking about. We know about the over-expansion of credit, and they do not talk about how they brought that to a grinding halt in a very damaging way—that was the second part of the crisis. We might go into a third crisis if they do not control the public accounts and the public obligations sensibly.
	There are huge disputes about what should be factual matters. It seems very clear to me that this country is massively indebted in the public sector, and that that debt has expanded many times in the past two years as a result of the policies that the Government have been pursuing, both through their running of large deficits and, more importantly, through their very expensive policies of support, subsidy and guarantee to the banking sector.
	Let us look at the figures. The Government admit—I think—that there is public borrowing of about £700 billion. If we add in private finance initiatives, public-private partnerships, Network Rail and some other off balance sheet liabilities, that figure is about £1 trillion. I hope that they would accept that figure.
	There are, too, about £1 trillion-worth of unfunded pension liabilities. The Government can say that it is not convention to put them on the balance sheet in state accounts, but it is convention to put them on the balance sheet in the corporate sector. Indeed, it is a legal requirement to do so—imposed by this Government and strictly enforced. The hon. Member for Twickenham (Dr. Cable) might think that I have made a mistake and I am misrepresenting those figures, but I assure him that pension liabilities are liabilities of the state. They represent money that we do not have and that we have to pay out.
	On that basis, the figure is £2 trillion, but to get the Government's true financial position we then have to add something for the banks. If we took on the Government's private sector accounting rules, we would have to put on the balance sheet the gross liabilities of the banks that we have bought, in the proportions of the shareholdings that we have acquired. That would add another £2.5 trillion—for the banks, the liability is £3 trillion, and we own most of that. That adds up to £4.5 trillion.
	Of course, those banks have some assets. I am pleased to say that we will not lose £2.5 trillion, but I fear that we will lose quite a lot of money on these banks. We have, after all, already lost £24 billion in about six weeks on the RBS shares that we bought, based on the losses that RBS has had to report after the shares were purchased. We have lost £10 billion on the HBOS shares that we have bought so far, based on the losses that HBOS has had to report through its profit and loss account. The losses on the shares, based on the current share prices, are similarly very large figures. We can lose a lot of money on this.
	If Government Members still do not like the idea of putting those gross amounts on the balance sheet in the way that a company would, why not put on the specific guarantees, subsidies and injections, which would amount to about £1 trillion?

Brooks Newmark: The Chancellor has asked the banks to be transparent in their accounting only this past week. Is this not a case of "Don't do as I ask; just do as I do"? The Government should at least be making what is going on off balance sheet as well as on balance sheet far more transparent.

John Redwood: The Office for National Statistics is going to demand quite a big recognition of these banking risks. That recognition may not be for the full amount that I have suggested, but it will take our total indebtedness as a country, as defined by the ONS, to well over 150 per cent. of national income. That is well above many comparable countries around the world that have not blundered into so much bank ownership as this country has through the actions of the Government.
	What should the Government do to start to cut the risk? First of all, they must recognise that the risk is colossal and that, if they get it wrong, taxpayers could be left hopelessly stranded and have to pay enormous losses. They must recognise that house prices are still falling, that the mortgage experience is deteriorating and that there could be more bad loans than we know about. They must recognise that the corporate sector is in deep trouble—I fear that there could be many more bankruptcies in the months to come—and that corporate loan books are still deteriorating at a terrifying rate.
	For some unknown reason, the Government have made the taxpayer stand behind all those problems. Although a central bank must make sure that a main bank does not go under, it should do so through short-term lending. It should act as an intelligent bank manager and tell the bank involved to cut its costs and risks and to close down its casino banks. It must tell that bank to stop paying people £200,000, £300,000 or even £400,000 a year when they are making colossal losses that the taxpayer has to stand behind. It is grotesque that we, the taxpayers, are now expected to stand behind people who want to earn £200,000, £300,000, £400,000 or £500,000 a year, with pensions to match, even though their banks are loss making and need state capital and subsidy to survive.
	I am a well known exponent of free enterprise capitalism. I am all in favour of people in the private sector getting great bonuses and lots of money if that is what they deserve and if they do it in the normal way, but I also think that they have to live with the downside. High rollers who get it wrong should get no benefit from doing so, and it is deeply offensive to many people in this country—and I am sure, in their honest moments, to many Labour MPs as well—that this Government are far too generous with the subsidy and capital that they give to the broken banks. The result of the Government's actions is only that there is a delay in adjusting those banks and getting them sorted out so that they are in a position to behave normally again.
	The banks involved cannot be subsidised into lending more: they have to be sorted out to lend more, and that means getting rid of the rubbish. They must sell some of their foreign banks and some of the assets that are good so that they can get cash to do something with. There has to be a patient and difficult case-by-case analysis of every loan on their books, and there also has to be some intelligent banking to see how many people can be got through the crisis and how many unfortunately cannot. For the latter category, it may be better to close the loan down quickly before there are more broken dreams and more lost money.
	The Government will find out—as I think that they are beginning to do—that owning something means being responsible for it. By all means let us have intelligent and able people who are not politicians or civil servants running the banks that the Government own on behalf of the taxpayer, but they have to do so according to a sensible and understandable remit from the Government. They are not being given that remit, even though it should be very simple: cut the risk and the losses, get us out of dangerous things like investment banking activities, sell some of the good overseas banks because we need the money and should not be standing behind them.
	The Government have placed the country at grave financial risk, financially. They were warned, but they ignored the warnings. They blundered because they regulated, and over-regulated, but they did not regulate the thing that matters. Will they now please concentrate on the thing that matters? That is that we now have, on the taxpayer's account, two broken banks that are bigger than the national income. Do the Government understand how risky that is? Will they issue immediate instructions to cut the risk? Will they understand that the British people will not put up with, or be grateful for, paying enormous salaries to people for doing the wrong things in broken banks that then lose us a packet?

Michael Meacher: I was referring to a boom that led to a most serious bust between 1990 and 1992. That bust was the result of the boom being allowed to get out of control, so I do not think that all the lessons are on one side. As I say, history points to a rather different story.
	The debate hinges on the fact that the Government have always rightly insisted—I do not think that anyone really disagrees with this—that they had to save the financial system from total collapse in order to preserve the real economy from deep recession by restoring lending to business, preferably at pre-crunch 2007 levels. What has actually happened—here I agree with what the right hon. Member for Wokingham said—is that unimaginably stupendous sums of taxpayers' money have been spent on recapitalising the banks and insuring them against their ill-acquired mountains of toxic assets. However, lending to businesses and home owners has hardly increased at all, although such an increase was the whole aim of the exercise. Indeed, the banks actually decreased lending in the last quarter of 2008, and they announced not long ago that they are reducing it further in the first quarter of 2009.
	That in turn has forced the Government to try to substitute for the banks turning off the taps by increasing their lending to some stricken parts of industry. A notable example is the car industry, but the Government have also increased lending to some other industries. That substitution cannot possibly be more than extremely limited, because the deficit in the public accounts is already enormous, and it can certainly never begin to measure up to the scale of normal bank lending to the economy, which usually runs at something like £500 billion a year. The fate of the whole economy continues to depend on the banks.

David Davis: It is always a pleasure to follow the right hon. Member for Oldham, West and Royton (Mr. Meacher) because he matches eye-watering damage to the economy with eye-watering honesty, and we always know that he means exactly what he says on these issues. I suspect that many Opposition Members agreed with probably three quarters of his analysis, although perhaps not the last few words.
	We are not unused to hearing people now argue that this is the end of free market capitalism or the fault of free market capitalism. We are also used to hearing people refer to the 1930s and cite Keynes as the solution. With that in mind I had a look back at what I remembered from a biography of Keynes and found one of the last things that he said about resolving some of the economic problems of his day—not that dissimilar from those we face today. He said:
	"I find myself more and more relying for a solution to our problems on the invisible hand which I tried to eject from economic thinking 20 years ago."
	So he, after two world wars, the tragedy of the gold standard and the tragedy of the 1930s, during which many of our grandfathers spent their time on marches or hunger marches, he came back to the thought that whatever we do, the answer to a recession, the answer to a depression, is to make the economy grow again. What we must not do, in curing one of the problems that we have, is poison the whole economy.
	I shall go through Keynes's analysis, but come to a slightly different conclusion. He also recognised, probably more than any economist before him, the importance of confidence; he first referred to it as "animal spirits", the driving part of the economy. He recognised that confidence was ephemeral, but that it was not irrational.
	If it is difficult to raise capital and get loans, if markets are uncertain and if there are problems of demand or lack of demand—indeed, if there are prospects of high taxation in the future—confidence is enormously harmed. My point is that the Government's management of this issue in the past year or two has added dramatically to our problem; it has reinforced the position highlighted by the IMF—that we will probably face a longer recession than anybody else. There are many other structural reasons, but that is one of them.
	At first, that was almost inexplicable to me. Why were the Government so slow, timorous and ham-fisted about their handling of the banking crisis? After all, there is no shortage of examples of how—and, indeed, of how not—to handle one. Anybody who understands capitalism will recognise that banking crises are not that unusual. They happen quite a lot, and there have been a few in the past decade or so. This is not a new point, but it is now widely recognised that the Swedish banking crisis was handled well and that the Japanese one was handled badly. Interestingly, the Government have mimicked not the Swedish example, but the Japanese one. What is the difference? Each country started—like all Governments, ours included—by underwriting the bank depositors. That was quite right; that is how to stop a run on a bank. It is straightforward, although expensive in some senses, and it has to be done. There is no choice about that stage.
	It was in the second stage that the Government deviated from the Swedish example. I hope that the House will forgive me if I recount that example. The Swedish Government said to their banks, "You will identify the full extent of all your losses and liabilities before anything else happens. If you do not, there will be no support." That is a clear and brave thing to do; perhaps our Government did not do it because it is so brave. What is the advantage of that approach? First, it makes the shareholders meet the losses first, as is entirely proper in a capitalist economy; that also reduces the taxpayers' loss. Secondly, it pre-empts all the problems of bonuses, pensions and pay-offs that shame all of us who believe in a free market economy. Shareholders who have just lost their entire wealth are not about to stand for that sort of behaviour; Lord Myners might, but those shareholders, I am afraid, will not. Thirdly, the approach identifies the banks into three categories: those that do not need help; those that can reasonably use help to serve the nation's needs for borrowing and industry capital formation; and those beyond recall—those now known in the parlance as the "zombie banks", which are the dead banks to which we are still giving transfusions of taxpayers' money.
	The approach is tough, but it is a necessary precursor of what we should have done in this crisis. That shock action in Sweden stopped what is known as a liquidity asset spiral—the continuing reduction of the assets on which the banks base their value and activities. It was predicted that the disposal of toxic assets in Sweden would take 10 years; the vast majority was done within three years. What was the cost to the nation? If we count interest, it was 2 per cent. of GDP; if we do not, it was nothing—zero—because the issue was addressed up front. The action stopped, throughout the whole Swedish economy, what is known by the technicians as payment uncertainty: the fear that the next customer will not pay the bill, and the fact that someone cannot get credit insurance. Such things vanish when the problem is dealt with.

Doug Henderson: I understand the right hon. Gentleman's point, and if I had stuck to my speech I might have come to it myself. However, as long as we are moving broadly in line with the changing debt and deficit financing levels of comparable countries—the United States, Germany, France, Japan and so on—and as long as we are moving on the same track, even if it is an upward track, I would not expect that confidence to go. As long as that confidence does not go, the relative strength of the currency will be retained. I understand the worry, but with a little careful engineering, we can avoid falling into that trap.
	I do not have enough time to respond to the right hon. Gentleman's other question in detail, but the whole of world trade will break down unless there is an international agreement between the countries that are running surpluses and those that are running deficits to act together. That would mean the Chinese starting to spend a little more in China, which would mean that they would not have to export so much, which in turn would mean that we would not have to import so much from China, meaning that we would not have such difficulties with deficit financing. Providing that there is an international agreement to take that on board, we will find a way out of this mess.
	Those on the Conservative Front Bench have to face up to the hard-line decisions. They have to recognise that the enemy is not inflation. The enemy was inflation for a number of decades, but the enemy today is deflation. The great danger is that we do what was done in the 1930s. Before Keynes got his way and before Roosevelt introduced the new deal in 1933, the world economy was in a serious position. Instead of trying to stimulate the economy by having programmes of public expenditure and keeping interest rates as low as possible, we had the opposite. In the early days of the recession, in '29, '30 and '31, we had high interest rates. We even put interest rates up initially, until we realised the folly of doing that.
	When interest rates went down, the economy did not respond to them and people said, "What now?" It was at that point that Keynes said, "You might want to have some public expenditure"—the right hon. Gentleman and I might agree at least on what was said historically. Today we are in the same position. We have a choice of ways to stimulate the economy. We can have some tax cuts—I think that that will be essential—to give a boost quickly. I am not a 100 per cent. believer in the VAT cut, but whatever one might say about it, it is a quick way of having an effect throughout the economy. We need to look at the VAT cut again in a year's time and see whether it has had an effect. I suspect that my initial reaction was wrong and that it will have more effect than I thought it might.
	We also need programmes of public expenditure as the economic stimulus is taken forward, and we have choices on what that expenditure should be. Some aspects of public expenditure are automatic—they just happen, because of the stabilisers in the economy. That is usually pretty good, because people who need the benefits usually spend the money that they get, which is good for stimulating the economy in the short term. If the Minister is going to give us a taste of what might be in the Budget, I hope that we might hear something along those lines.
	On public expenditure on public works, as it were, there are various areas of our economy where we have obvious needs. We need to get parts of our transport system right and now is the time to do that. We need to spend money on education and skills to ensure that when we come out of the economic difficulties that we are currently in, we have people who can take up the future challenges and compete internationally. There has been talk around the Chamber of cuts in expenditure for further education colleges, but that is not true.

Colin Burgon: I agree with the final comments of the hon. Member for Aldershot (Mr. Howarth)— [Interruption.] I refer to his comments on the need to rebuild Britain's manufacturing base. I had better clarify that, because I am after a job in the future.
	I want to avoid what I consider to be pretty senseless tit for tat. I want to avoid aiming for the easy target presented by the individual bankers who have caused outrage in society. I want to deal with some of the fundamental questions. I think that we should be discussing and arguing about those, and hopefully the public will be listening.
	It is my contention—here I pick up a point made by my right hon. Friend the Member for Oldham, West and Royton (Mr. Meacher)—that the past 30 years have been dominated by a neo-liberal consensus which has unfortunately been accepted by new Labour and, much to our detriment, willingly embraced by the Conservatives. I am not so sure about the Liberal Democrats.
	Let me define neo-liberalism. The theory is that the market should determine individual actions, that we should support privatisation and deregulation and trade and financial liberalisation, that we should shrink the roles of the state and of trade unions because they interfere with the workings of the market, and that, on an international level, the International Monetary Fund and the World Bank should carry out the structural adjustment programmes that introduce such ideas into the societies of developing countries.
	How do these incredibly sophisticated ideas work out in our everyday lives? I think it is tremendously important that at an individual level, we are defined as consumers rather than citizens. The high priest of neo-liberalism, Ronald Reagan, said when he was elected that government is the problem, not the solution. Those involved in the neo-liberal revolution of the mid-to-late 1970s promised that an economic panacea could be delivered that would mean growing wealth for everyone, but that was far from the case. Neo-liberalism has not delivered gains of that kind for people; in fact, I would argue that throughout the world it has delivered growing insecurity.
	Over the past three decades there has been a widening of inequality between rich and poor nations, and—just as important from our point of view—a growing inequality within the populations of the advanced economies. Another less well-known fact is that those three decades of neo-liberalism have led to no improvement in the living standards of large sections of humanity, and in many areas incomes have fallen.
	As for the international dimension,  Real World Economic Outlook, which was published by the New Economics Foundation in 2003 and used the IMF's own figures in assessing the world economy, described what had really happened over the past three decades. World GDP per head was static between 1980 and 2002. In some crucial years—at roughly the time of the collapse of the Soviet Union, between 1988 and 2002—world GDP per head actually fell. Between 1980 and 2002, real average GDP per head in the countries outside the IMF's group of so-called advanced countries, comprising four fifths of the world's population, fell from $1,400 to $1,100 per year.
	What has been the impact in the home of neo-liberalism, the United States? The figures for median earnings of working males in the United States are interesting. The median earnings in 2005 were slightly less than in 1980.  The New York Times has been mentioned, and its report of 29 March 2007 is also interesting:
	"The top 1 per cent."
	of the US population
	"received 21.8 per cent. of all reported income in 2005...more than doubling their share of income in 1980."
	That approaches levels of wealth distribution last seen in the 1920s. Warren Buffett, one of the richest men in the world, stated in 2006:
	"There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning."
	He was absolutely correct.
	What has been the impact of these neo-liberal ideas over the past three generations? What have they done to our society in Britain? A recent article in  The Guardian dealing with inequality in Britain makes worrying reading. Using 1974 as a baseline, it said that inequality had increased by 40 per cent. by 2006.  The Guardian explains that the increase
	"was the sharpest in the developed world",
	and suggested it was partly the result of the political architecture that we labour under.
	Child poverty figures are particularly important, as they show how the economic system works out for the most vulnerable. We now have 3.9 million children living in poverty in the UK, after housing costs are taken into account. The UK has one of the worst rates of child poverty in the industrialised world. This is the result of three decades of this economic system working through. I could go on and highlight the figure for child poverty in the east end of Glasgow, which is, I think, about 98 per cent., or even state that four out of 10 kids in London are brought up in poverty, even though the richest square mile of the country is located in the city.

Nick Ainger: I listened with interest to what Opposition Members said about how removing the regulatory role from the Bank of England has led to the present difficulties, but the same situation exists in the US, Japan and across Europe. Yes, there have been serious failures of regulation, and I accept that the FSA and other regulators got into a tick-box culture that meant that they were not looking at the big picture.
	The classic case that should have sounded the warnings was Northern Rock. That involved another tick-box culture where everything, according to the regulator, was in order, yet its business model was totally dependent on the wholesale credit market. As soon as that dried up, Northern Rock's business plan collapsed, after which the bank went belly up and had to be rescued.
	The problem was that the regulators were not looking at the other banks either. The revelations about HBOS, for example, clearly show that it was getting into virtually the same position as Northern Rock. In addition, we now know that RBS was massively leveraged and that the takeover by ABN Amro was a disaster that created real instability in that institution. Yet because the FSA was merely ticking boxes and not looking at the bigger picture, it missed the real problems that the banks were heading for.
	I want to say something briefly about the role that the banks are playing on what might be called the front line, where small businesses are having real problems accessing some of the loans schemes. The Treasury Committee took evidence in Leeds, in a session that highlighted that particular difficulty. We were told that a very successful company in Humberside needed an extension of its overdraft, but that its bank was being extremely difficult and unco-operative. It turned out that the local regional manager of the bank involved was the fifth to hold the post in the past two years. He did not know really anything about the region or its particular companies, and I believe that the banks' loss of direct contact with businesses, and of the knowledge and understanding of what they do, is causing real problems.
	I urge the Government to get to grips with the banks. They must do so at the macro-level—the aim is to get the money out as quickly as possible—but they must also look at how the banks are operating at the micro-level, because that is where many of the problems lie.
	I should like to mention an issue in which I am particularly interested, although since the collapse of Lehman Brothers and the real onset of the global recession, it has gone out of the headlines. It is the huge commodity spike that took place in late 2007, which peaked when the oil price reached nearly $150 a barrel in July 2008. My concern is that when we come out of the recession, there will be another commodity bubble, which will prevent or delay recovery. The Government, through the G20, should look for a way to ensure that commodity markets are far better regulated.
	Finally, the G20 is a real opportunity for us to ensure that there is quality regulation throughout the world; to be seen to be acting together to address the problems, particularly in the developed world; and to look at how we can co-ordinate fiscal stimulus. At the end of the day, manufacturers here and in, say, Germany are dependent on both countries' economies to create demand for products, whether those products—cars or whatever—be German or British. Co-ordination is a key to that. I am sure that the Government will do what they can to ensure that the G20 is a success, both on the regulatory front and when it comes to addressing the overall problem in the economies of the world.

Stephen O'Brien: I ask the House to note my entry in the Register of Members' Interests. First, I want to congratulate my hon. Friend the Member for Tatton (Mr. Osborne) on a really impressive opening speech on an important motion. Although we are talking about a very complicated area of policy and politics, he expressed how people feel today. He set out how they view the Government's activity, and how they rate its effectiveness—or, more precisely, its ineffectiveness.
	I had not intended to make this point, but I want to mention the Chief Secretary to the Treasury's somewhat smug reply to my hon. Friend's speech, in which she referred to the early '90s. I do not know where she was in the early '90s, but I was there; I know what unemployment looks like, and I know what redundancy looks like. Moreover, I know that it does not help the people who are in the thick of it—in the construction and building materials industry—when those who were not there think that they can preach to others. Those of us who have been through a recession know what is absolutely essential: confidence, stability, the cost of capital and, above all, having capital available. Whether a business person is on the shop floor, out there making the roads or even in the boardroom, what makes the difference when they take their risks and make their decisions is knowing that those things are in place.
	T he Government of the day were certainly not blameless, and I was critical at the time, but they recognised the issues and helped us to restore and retain jobs. The Chief Secretary to the Treasury—this is why I make the point—could not have sounded more shrill and insulting to the stalwart people who soldiered through that time. I hope that she will reflect seriously on the fact that her comments do not play well with the people whom she claims to represent as a Minister of the Government. One need only look at the current number of housing starts, which are at 5,000 a month. In the very worst of previous recessions, they were about double that, at 10,000 a month.
	Given today's unemployment figures, we need to recognise that this recession puts other recessions into the also-ran department. The rate of the rise in one month is sufficient to make most people afraid; it is eye-watering compared with the rates in previous recessions. Let us not for a moment try to pretend, as the Government have done today, that the recession is not deadly serious, and that many people in our country are not frightened. Frankly, they are right to be afraid.
	We may say the usual knockabout stuff about an apology-free Prime Minister, the "Blame anyone but me" attitude, and the fact that we are now in the Brown bust, despite the Prime Minister's claim that he would get rid of boom and bust. Many right hon. and hon. Members sought to include those points in their speeches, but let us not forget that in recessions, the victims are people—our constituents. The remedy is to back business, and for people to get back to work in those businesses. I know that this sometimes pains the Government and many Labour Members, but whether they like it or not, when we talk about business, from the shop floor to the boardroom, we are talking about the private sector.
	Yet again, as in all recessions, it is the private sector that takes a disproportionate share of the pain. Those in the private sector are ultimately the wealth creators, the risk takers, the entrepreneurs and the investors. Now that I am in the public sector, I understand why I was so angry with it when I was in the private sector. It seemed to think that a recession was something that happened to other people, not those in the public sector. In a recession, the national interest is damaged and deeply affected for everybody, but we all depend on the private sector for growth, wealth creation and ultimately the tax revenues that fund all our choices and democratic opportunities, and we must back it.
	I received an e-mail from Robert Jenrick, who relates a story about Newcastle-under-Lyme, where another good business has fallen victim to the economic crisis—a local engineering firm for over 40 years, and exactly the kind of respected employer of skilled workers that we must ensure survives the recession. Its parent company is Wrekin Construction, a profitable business which recently built Keele university's science park. The business collapsed after Royal Bank of Scotland, now majority owned by all of us as taxpayers through the Government, demanded repayment of its entire overdraft. A similar thing happened as a result of a demand from Midland Bank in the north-west back in 1979. I should know; it had a big effect on my family. More than 500 jobs may now be lost as a result of the engineering firm's collapse. That could be unnecessary, provided the banks start lending again.
	Among all the issues bearing down on this country now are the initial crisis, the banks' inability to continue lending, and the fact that they had to hunker down and recognise that they had made some serious misjudgments. They had got out of control, they had lost what it was truly to be a banker and had become financial speculators and product innovators while most of those who had supervisory responsibility did not know what those products did.
	It is vital that we all club together to help in political terms and get the banks lending again. Without lending, we cannot fuel, preferably from the bottom up—from the SMEs up—the necessary business activity. We cannot support bankers who have decided to take public money to support themselves. We are right to be angry and to challenge the intention of those banks to continue to pay bonuses. They say they are contractually bound, but I would have said of those who might have been expecting a bonus, "Let them sue for it." It may have been interesting to see how many of the arguments they advanced to get their entitlement, as they see it, would cut any ice. We must maintain that supply of fuel to business, and at present it is not getting through.
	The key to success, as we know, is confidence. We start from a poor base. The uncertainties, particularly in relation to corporate tax, mean that most businesses have not been investing in their future, in innovation, in competitiveness and in ensuring that they can capture and retain markets, as they would have done had normal investment taken place in the so-called good times.

Stephen O'Brien: I will not, as we are all constrained by the time limit.
	It is important to recognise that we start from a low base of business investment. Even in these tough times, businesses have to think about where, if they can get capital, they place that capital to ensure that they are best positioned for recovery, so that they do not find themselves disadvantaged by the recession, which has largely had nothing to do with their good business activities and everything to do with another part of the economy. In addition to all that others have said, I suggest that there is an opportunity for the Government to—let us call it this—steal our policies, including the £50 billion national loan guarantee scheme. Despite the various attempts by various Whips and others to rubbish that, nothing has been proved against it.
	We have also proposed a tax break for new jobs, making sure that we reduce employment costs for small businesses by cutting national insurance, and helping small business with their cash flow by delaying VAT bills for six months. Through the Department for Business, Enterprise and Regulatory Reform we need to tackle the credit insurance calamity, which is causing major problems of supply. The Government are not prepared to acknowledge that and Lord Mandelson is apparently unwilling to meet leading retailers to discuss it.
	Another point, which I hope I will be able to discuss later with my right hon. and hon. Friends on the Front Bench, is that we should look seriously to the past when the Industrial and Commercial Finance Corporation, which was succeeded by 3i, was an extremely good way of trying to get a balance between equity and debt risk into new and start-up companies and early development companies. That was a success story, and I do not think that the conditions today are dramatically different, so we should look to those lessons. But perhaps, rather than being owned by the Bank of England and the clearers, such an entity might be very interesting to the venture capital trusts that are looking for opportunities to get their money to work.
	I have to report an insidious and worrying effect of the Government's increasing involvement in the everyday aspects of our lives. As some may have read in the press, my constituent , Geoff Robbins, who has a thoroughly sound business, rang up his bank, RBS, for a normal merchant account, and after the usual questions, the final one was whether he had any political or judicial affiliations. Can you believe it? A well-known journalist tested that and received exactly the same reply and the bank was embarrassed and had to backtrack. That is a sign of the times. When banks start to become state-owned, people begin to worry that unless they are something to do with Labour they will be disadvantaged. That is a deeply worrying development in our national life. One has only to pose the question in the future: Labour or Conservative, which is safer? The answer is Conservative.

Brooks Newmark: The Prime Minister has indeed taken Britain from boom to bust. As we heard from my hon. Friend the Member for Tatton (Mr. Osborne), today the IMF predicted that the global economy will shrink by 0.6 per cent. in 2009, compared with a figure of 3.8 per cent. in the UK. By contrast, the United States economy—I know that the Prime Minister likes to contrast us with the US—will contract by 2.6 per cent. Next year, however, while the rest of the world returns to growth, the UK will continue to shrink. As the economy shrinks, so do tax revenues, and tax revenues from the City alone are expected to drop by up to 40 per cent., with a loss of up to £25 billion in tax revenues.
	Unsurprisingly, sterling has collapsed to a 23-year low of $1.35 from a peak of $2.11 under a year ago. Let me remind the Prime Minister that it was he who said, in 1992, that a weak currency arises from a weak economy, which in turn is the result of a weak Government. The problem began the day that the Prime Minister stepped into No. 11 Downing street. In making the Bank of England independent, removing debt management to the Treasury and removing day-to-day supervision of the commercial banks, he left the Bank, as my right hon. Friend the Member for Wokingham (Mr. Redwood) pointed out, blind in one eye as to what the Government broker was up to, and blind in the other as to what was going on with the clearing banks.
	It was the Prime Minister who set up the tripartite system of regulation between the Treasury, the Bank and the FSA, with no one ultimately taking responsibility when the economy began to unravel with the collapse of Northern Rock. Indeed, in his Mansion house speech of 16 June 2004, he said:
	"I want us to do even more to encourage...risk takers."
	On that policy, he was certainly successful. As we heard, he sold gold at the bottom of the market, at an average price of $275 per ounce, when its price subsequently rose to almost $1,000 an ounce, costing the public purse £5 billion. He also abolished tax benefits that pension funds had gained from advance corporation tax, costing pensioners £5 billion a year and diminishing the value of personal savings by more than £100 billion. His tax credits system is in tatters, with more than two thirds of recipients receiving the wrong amount at one point. There have been £5.8 billion of overpayments, with £500 million written off so far and another £1.5 billion unlikely to be recovered.
	In the meantime, debt ballooned. While the Prime Minister sought to maintain his golden rule of keeping net debt at about 40 per cent. of GDP, he put more and more debt off balance sheet so that by the time I wrote my pamphlet "The Price of Irresponsibility" for the Centre for Policy Studies last October he was hiding £2 off balance sheet for every £1 that he was keeping on balance sheet. Not surprisingly, he become known as the Enron Chancellor.
	Today, the situation is even worse. If public sector pension liabilities and private finance initiative schemes are added to the on-balance sheet debt of recently nationalised banks, total debt today is not the £700 billion that the Government acknowledge, but as my right hon. Friend the Member for Wokingham indicated, a whopping £4.6 trillion. In other words, it is not 40 per cent. of GDP or even 48 per cent., as the figure of £700 billion implies, but almost 300 per cent. That is about £200,000 for every household in the country.
	According to some estimates, it will take us until 2030 to bring the debt to GDP ratio back to 40 per cent. That is the Prime Minister's legacy to our children and our children's children. Yet in October 2008 he said:
	"I have to say to you that we face this situation as a country with relatively low national debt".
	If that is the case, why is UK Government debt considered riskier than that of McDonald's?
	What is the Government's solution? The VAT cut cost £12 billion, and in the words of President Sarkozy it has "absolutely not worked". The Monetary Policy Committee has cut interest rates to a record low without benefits being passed on to businesses and borrowers. I learned in a recent meeting with the Essex branch of the Federation of Small Businesses that many businesses are having either facilities withdrawn or spreads widened. A case in point is an automotive parts manufacturer in my constituency that has a £2 million loan outstanding. Notwithstanding the economic climate, it is still generating £2 million a year of cash flow, yet an internal decision taken at its bank that automotive loans should be withdrawn has meant that a perfectly healthy business is facing closure.
	The banks are not reciprocating taxpayers' continued trust and investment in them by maintaining support for perfectly healthy businesses in my constituency, in Essex and up and down the country. The Government have made a number of headline-grabbing proposals, including those noted in the motion: the working capital scheme, the national internships scheme, the asset-backed securities guarantee scheme, the homeowners mortgage support scheme, the car manufacturers finance guarantee and so on. None of them has yet been implemented.
	In the meantime, by scrapping the 10p tax rate the Government are hurting some of the lowest-paid in our country. The problem is compounded by the record low interest rates, which are hurting millions of pensioners up and down the country, some of whom are receiving 0.1 per cent. interest on their savings accounts. Only two years ago, in a speech on 11 May 2007, the Prime Minister said:
	"If you work hard, you're better off. If you save, you're rewarded. If you play by the rules, we'll stand by you."
	However, in all their proposals the Government are doing absolutely nothing for those who have been thrifty and saved all their lives, especially pensioners.
	On 21 March 2007, again only two years ago, during his Budget statement the now Prime Minister reiterated his mantra that we would never
	"return to the old boom and bust."—[ Official Report, 21 March 2007; Vol. 458, c. 816.]
	Yet today we face one of the worst budget deficits in living memory, record borrowing both on and off balance sheet, a collapse in sterling, unemployment breaking the 2 million barrier—as the hon. Member for Coventry, North-West (Mr. Robinson) acknowledged, it is likely to climb to 3 million—and an economy shrinking both this year and next at a rate greater than almost any other western economy.
	Still the Prime Minister refuses to acknowledge that if he is not the cause of the collapse of UK plc, he is its architect. For that, at least, he should come to the House and apologise to the British people for taking Britain from boom to bust.

Robert Syms: I declare my interest as stated in the Register of Members' Interests.
	The debate has been interesting. I was at school in the early 1970s, when there had been a liberalisation of credit and a property boom. In 1973, 1974 and 1975, we had a bust. The difference was that the Bank of England created a lifeboat so that Slater Walker was wound down, along with several other banks and institutions. I think we had a problem with Burmah Oil, which ran out of cash and lost its shares in British Petroleum to the Government, who bailed it out.
	The crisis was similar, but the difference was that the Bank of England knew what was going on, got money together and sorted out the banking system in a few years. The changes that the Prime Minister made when he was Chancellor to the independence of the Bank of England have made a difference to our regulatory regime. Had the Bank of England retained its former role, I cannot conceive of being where we are today.
	Having said that, the City is a vast institution and we have some sophisticated banks. Our country rather depended on our property values and there were imbalances in the world economy, in which many countries generated too much in savings but Britain did not save enough. Savings flowed into our British economy and our banking system used them to sustain a property boom. Inevitably, the bust followed.
	To be fair, no one could foresee that the billions of pounds in the wholesale money markets would disappear as quickly as they did. If one is honest, one must recognise that that has probably caused an unprecedented problem. However, it has always been clear that that sort of money is hot money and that, in the long term, the most sustainable form of investment in the economy is savings and people putting money in banks in an old-fashioned way.
	There is now a massive hole in the British economy, which must somehow be plugged. It means a major adjustment to housing prices—the sooner that occurs, the better, so that the market can start to function normally again. Sterling has been devalued, and although I have mixed feelings about it, we can say, "Thank God we're not in the euro," because it means that the British Government can use economic and monetary policy by reducing interest rates and, to some extent, letting the currency take the strain. We also have the automatic stabilisers and the modest economic stimulus that the Government introduced, although I am not sure that the latter will make much difference.
	Three things have caused a major problem. First, as the crisis has unfolded, the Government have been behind the curve because they have come back with progressively bigger bail-outs and further help for the financial system. That has knocked confidence because people do not know where it will end and there have been a few surprises. My right hon. Friend the Member for Haltemprice and Howden (David Davis) set out what happened in Sweden, where everybody had to come clean to ascertain the damage at the beginning of a crisis. That would have been a far better way of dealing with the damage to our financial system.
	Secondly, although many of the Government's announcements have been broadly welcomed, it is a fair criticism that the detail was not worked out before the announcements were made. There has been a tendency to try to get headlines in the newspapers. Even when the schemes have been worked out, many people in the banking system and various other parts of the economy are not always aware of the detail. Many bemused businesses and constituents who have read about schemes in the newspapers have approached me to ask, "What's going on? Can we get it?" There is genuine confusion.
	Not only do more details need to be worked out, but there has to be more collaboration with the financial system and a system for disseminating information. In times gone past, benefits have been advertised in order to increase take-up among people. The Government ought to consider advertising as a means of getting across the message about where people can access schemes. The Minister has talked about a website; perhaps advertising the website would be a way of getting that message across. When people are in need and they think that some help is out there but cannot find out where it is, that tends to cause confusion and make them feel rather dispirited.
	Thirdly, the Government have to give a clear lead about where we are going. It does not help that at each stage of the economic crisis the Government have tended to go for a rosy scenario. The last full Budget was a "hope for the best" Budget. The growth figures in the pre-Budget report looked unrealistic even then, and they will need to be revised. The economic situation is deteriorating, but that was always likely to be the case. We will have a new Budget in April which will contain even more red ink detailing the Government deficit and Government debt, and the predictions of growth will probably be downgraded again. That knocks confidence.
	My hon. Friend the Member for Tatton (Mr. Osborne), who made the first speech that we heard this afternoon, put his finger on the main problem, which is the fact that the banks have had a bail-out but have been given mixed messages about what to do. We all have evidence that ordinary banking involving making loans to companies—many of them viable and profitable companies—is not occurring. There is a credit crunch in the British economy that is having an effect on businesses that are long-term and viable, but which face real problems in the short term.
	The Government have to iron out their version of the relevant scheme to try to get money moving in the economy. I have been in business for most of my life—I have a background in construction and property—and I have never known a situation like this. It is dire out there. Many people are hanging on by their fingernails. We need clear leadership from the Government about where they are going and clear information about the schemes that they are promoting, because we are going through a very difficult time indeed.
	We have had the financial shock and now we have the shock of the recession, with many people losing their jobs. However, levels of personal debt are substantially higher today than they were in the early '90s. That means that if people's incomes are diminished, it does not take very long for them to get into serious financial problems, even with the help that is available through the various schemes. That will eventually create a problem for the banking system, too.
	We are in for tough times. I agree with my hon. Friend the Member for Tatton that our economy might be configured very differently at the end of this recession and that we may look at things differently. We have to use our good offices to resist protectionism, which is a cul-de-sac, but we also have to get our banking system working properly, otherwise the long-term consequences and the damage to the social and economic fabric of our nation will be dire.

Peter Bone: It is a great pleasure to follow my hon. Friend the Member for Poole (Mr. Syms), who made a powerful speech about the issues that affect people. I was particularly taken by his remarks about the pound. The pound has gone down from $2.11 to $1.35, which represents other countries' views of how bad our economy is. However, we are talking about a market mechanism that has worked well, because it means that our exports are now cheaper in America. American imports are more expensive in this country, which is also the market working. However, as my hon. Friend said, that would not have happened if we had been in the eurozone.
	I refer Members to my entry in the Register of Members' Interests, and particularly to the fact that I am a fellow of the Institute of Chartered Accountants in England and Wales. I want to say from the beginning that I do not think that auditors have come out of this series of events with great credit.
	I have learned a lot from sitting here for several hours today. The speeches from both sides of the House have been useful, new ideas have come up, and things that I had not thought of have been mentioned. I find it disappointing, however—I say this with sadness—that the Chancellor was not here today. It is also particularly disappointing that we have not had a debate on the economy in Government time. All these billions of pounds have been spent without the issue being discussed in detail in the Chamber. I want to say to the junior Minister that I think it unfortunate that the Chancellor was unable to attend. I notice that he was here for Prime Minister questions, but I am sure that he had a pressing engagement in a television studio somewhere in the country afterwards. I am making a serious point about what I see as a discourtesy to Parliament.
	I want to turn first to unemployment. I have run a manufacturing company and a service company, and the most difficult thing that I ever had to do in business was to tell people who had worked for me for years that they no longer had a job. I had sleepless nights beforehand, and sleepless nights afterwards. It was the worst thing that I ever had to do in business, so it gives me no pleasure at all to read out these figures. In February 1997, there were 2,063 people unemployed and claiming jobseeker's allowance in Wellingborough. Unfortunately, the figure today is 3,098. That represents a 50 per cent. increase since 1997.
	I recall that the Conservatives were thrown out of power in 1997 on a landslide, partly because of what had happened in the economy. I think that we have now reached a desperate situation in my constituency, and I say that with no satisfaction. We face a real problem. Thinking back to that rather nice little tune, "Things can only get better", I can tell hon. Members that they certainly have not done so in Wellingborough. We are significantly worse off than we were in 1997, and I fear that that situation is spreading across the rest of the country.
	I recently received a phone call from the managing director of a large employer in my constituency. I will not mention the name of the company for obvious reasons. It is a very good, well-established company that employs a lot of people, but, like everyone else, its orders have gone down because of the downturn in the economy. So what did one of the banks that we now own do? It went along to that company and said, "By the way, because your level of interest to turnover has fallen below a figure that we don't like, we are going to increase the interest on your borrowings by 2.5 per cent., or £750,000, a year." That could force this very good company either to lay off staff or to go under. That cannot be—I know that it is not—what the Government intended the banks to do, but that is what is happening in Wellingborough now, and it worries me greatly.
	One of the reasons that that is happening, in general terms, is that the banks had two options. One was to lend money to companies; the other was to get their capital ratios up by reducing such lending. The banks have gone for the latter incentive to improve their capital ratios. There is a strong argument for the Government giving a lead in the other direction on this. We cannot ask the banks to do both; it has to be one or the other, and they need some direction. I shall come back to the banks later if I have time.
	I want to talk about the business of bringing forward capital projects to increase employment. I see that as a very good idea. If capital projects could be brought forward, we would get the benefit of employment as well as a capital asset at the end of the day, which seems perfectly reasonable to me. In Wellingborough, however, we have a very strange situation.
	The further education college was given the go-ahead for a major redevelopment and it spent £1 million just getting it all arranged. Unfortunately, this major redevelopment also means knocking down the existing premises, moving on to a car park and allowing for the whole redevelopment of the town centre in Wellingborough. The go-ahead was supposed to be given on 17 December, but when 17 December came, no go-ahead was given. It was supposed to come last week, but the same thing happened again. We are told that the reason for the delay is that a Government quango had said to too many colleges that they could expand, so they have been left without the funds. Well, if now is not the time to bring forward funding for FE colleges, I do not know when is. I ask the Minister to address that. The Government said, quite logically, that something was going to happen, but it has certainly not happened in my patch—indeed, just the reverse.
	On the theme of bringing forward capital projects, it does not seem to be happening in the NHS. My constituency is seeing the closure of an out-patient facility. In fact, a quarter of the people in Rushden wrote to me to complain about the closure, but the replacement facility, which is in another constituency, is not going ahead; there is a delay. That new facility could go ahead in my constituency right now; the land and plans are available, so why is it not being done?
	Let me deal with an issue where I think the Government have made a complete mess of investment in the banks. They have gone into the mode of saying, "We must do something; we must do something. We must get a press release out; it does not matter what it is, but we must get a press release out." I do not expect the Minister to nod in agreement, but I am sure that some wise heads in the Treasury were saying that the schemes must not be announced until they are place. However, I also bet that some spin doctors were saying, "We must get it out; we must get it out". I think that is what has happened.
	On the wider front, all this started with a mere £37 billion investment into a few banks. I know that it has ballooned into billions and billions more, but if we go back to that initial £37 billion, the share subscription documents that the Government drew up must have been drawn up on the back of an envelope. They produced preference shares and we were led to believe that that was how this would go forward—with a 12 per cent. coupon, non-cumulative, that was going to be redeemable after five years. That was impossible; that was never going to happen. Those preference shares have now been converted into ordinary shares.
	In my view, this Government have had no strategic policy and no confidence building; they have been running around like headless chickens.

Philip Hammond: The hon. Gentleman said that unemployment would rise by another million. We shall all read the record avidly when it is published tomorrow.
	Of course, if the Government had not put off the Budget until the end of April, we would have had more bad news. We would have had an updated projection for next year's budget deficit, which—I do not think anyone will bob up to disagree with this—is likely to be nearer £140 billion than the £118 billion that was projected just four months ago.
	We have also seen Lord Turner's devastating critique not just of the financial regulatory system that the Prime Minister put in place but of his model of economic growth, based on global imbalances, huge bank leverage, and unsustainable levels of public and private debt. Against that backdrop, we have had to debate the economy in Opposition time—and we are debating it without the Chancellor, who cannot even be bothered to turn up to defend himself and his boss, and his own policies, and respond to the momentous economic news that we have heard today, although he was in the Chamber for Prime Minister's questions not 10 minutes before this debate began—so much for the Prime Minister's commitment to restoring the supremacy of Parliament. People listening to and watching this debate will draw their own conclusions about the Chancellor's motives.
	In fact, we have had no debate on the economy in Government time this year. Even when stung into reaction by the announcement a couple of weeks ago of today's debate, the most that the Government have been willing to concede is a general debate on the economy the week after next, on a non-substantive motion.
	We called today's debate because people throughout Britain who face redundancy, short-time working, layoffs, pay cuts, business failures, negative equity and repossessions cannot understand why Parliament is not debating the economic crisis all day, every day—never mind why it has not debated it this year. "Real help now" is the slogan, and I have a copy here of the glossy brochure that the Government have produced to promote it. But we have heard from Members this afternoon how hollow that slogan is, and it is clearly not a piece of rhetoric that the Chancellor is prepared to come here to defend. Nevertheless, I have to say—perhaps the Exchequer Secretary will convey this to the Chancellor—that even without him we have had a useful debate. Let me now mention just some of the important issues that have been raised in the course of it.
	The shadow Chancellor, my hon. Friend the Member for Tatton (Mr. Osborne), set the tone with a forceful case against the Government, along with a devastating analysis of Labour's failure to prepare the British economy for the problems that we now face and its continued failure to address those problems once they were upon us. Some of my hon. Friends offered specific examples of the failure of the Government's announced programmes to deliver.
	The hon. Member for Twickenham (Dr. Cable) made the important point that there is a distinction to be drawn between the institutional implementation of a programme and that programme's delivery of results at the sharp end. My hon. Friend the Member for Bournemouth, West (Sir John Butterfill) gave examples of constituents to whom the loan guarantee schemes were simply not available. We heard from my hon. Friend the Member for North-West Cambridgeshire (Mr. Vara) of the inability of a constituent of his to access an announced career development loan, and, perhaps even more worrying, the unawareness of his local jobcentre staff of that scheme.
	My hon. Friend the Member for Bosworth (David Tredinnick) gave an example of a denial by banks of access to one of the guarantee schemes for a company in his constituency. My hon. Friend the Member for Sevenoaks (Mr. Fallon) told us just how patchy knowledge and awareness of those schemes is, not just among jobcentre staff but among businesses. That point has been reinforced by the director general of the CBI.
	I think it was my hon. Friend the Member for Crewe and Nantwich (Mr. Timpson)—although he is a relatively new Member, he obviously has the knack of seeing right through the issues—who identified the problem, which is the Government's instinct to announce first and work it out later. His point was reinforced by the hon. Member for Northampton, North (Ms Keeble), who said that when something is announced it must be available. I hope that those on her party's Front Bench will take that message on board. She went on to explain the disappointment, confusion, dismay, anger and frustration caused when schemes that are supposed to be available are simply not there. That confusion, particularly in relation to help in the job and housing markets, adds to the loss of confidence, which, as my hon. Friend the Member for North-East Hertfordshire (Mr. Heald) pointed out, is so important at a time like this. My right hon. Friend the Member for Haltemprice and Howden (David Davis) reminded the House that Keynes himself came to recognise the critical role of confidence in an economic recovery. The recovery of confidence is, as a number of hon. Members pointed out, a necessary, if not a sufficient, condition for economic recovery and must be a principal focus of the Government's attention.
	Several hon. Members focused on the underlying problems in the banking system. My right hon. Friend the Member for Haltemprice and Howden drew attention to the very different models of Japan and Sweden, and the banking crises they had both suffered. He noted that the Government appear to be following the Japanese model of fiscal loosening while failing to get to grips with the problems in the financial system, and to be shying away from the Swedish response, which was ultimately successful. He offered a credible explanation for that choice: the Swedish route, of recognising the problems in the banks up front and taking them explicitly on to the balance sheet and dealing with them, requires some tough decision making, while the Japanese approach pushes the problem down the line to be dealt with and paid for later on. We all know that this Government's inclination is to push problems down the line—certainly beyond May 2010—even if that gives rise to the risk of zombie banks being created, as my right hon. Friend suggested.
	My right hon. Friend and a number of other Members referred to the challenge of defining the limits of taxpayer responsibility for banks in future, whether by some Glass-Steagall type approach or by other means. There was general consensus that the taxpayer will not in future be prepared to stand behind the kind of behaviour we have seen in the investment arms of banks. We will have to find a way forward—looking at the Turner report and the recommendations of Sir James Sassoon to the shadow Chancellor—to build a new structure that will protect the taxpayer while allowing a banking system to operate for the benefit of the real economy in this country.
	My hon. Friend the Member for Aldershot (Mr. Howarth), my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) and my right hon. Friend the Member for Wokingham (Mr. Redwood) reminded us of the flimsy basis on which the Prime Minister's reputation for financial management was built. His great coup of the Bank of England reform of 1997 is now exposed as having delivered a dysfunctional regulatory system. As my hon. Friend the Member for Braintree (Mr. Newmark) said, the problems we are now facing began on the first day of this Labour Government, when the now Prime Minister crossed the threshold of No. 11 Downing street. My right hon. and learned Friend the Member for Folkestone and Hythe reminded us—contrary to what some Labour Members suggested—how he and others were warning in November 1997 that this undermining of the Bank of England would create "a field day" for "spivs and crooks". Again, in 2002, 2003 and 2004, when he categorised the then Chancellor's Budget as a "credit-card Budget", he—and others—were warning of the hollowness of an economic model that built an economy on the sand of excess debt. The truth is that my right hon. and learned Friend and other hon. Friends have been consistently warning about the risks the then Chancellor was running with the economy, and they have been consistently ignored.
	Several Members referred to the confusion in Government policy towards the banks—on the one hand urging greater lending, on the other hand urging them to rebuild their balance sheets. Several Members also gave examples of banks that do not appear to have received the message from head office of the deal that the Chancellor and Prime Minister tell us they have done on extending lending to businesses that need support. This problem urgently needs resolving if the measures that the Government have taken are to deliver a freeing-up of lending at the sharp end.
	There were a couple of interesting speeches made by those on the Labour Benches. The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) used the D-word about this recession—I am sure that he will get a note about that later from the Whips. He accused the Conservatives of not being prepared to face up to what he called the "new economic situation". I should say to him that it is precisely because we are facing up to the fact that the challenges that the economy faces are on a scale not seen before and that the changes we will see in it require a sea change in our thinking that we have resisted signing up to the easy consensus being offered by Labour Members. We have insisted on taking on the chin the really difficult challenges that have to be dealt with. It is he and his colleagues who are not prepared to face up to the fact that their Government did not prepare the United Kingdom to be able to withstand this downturn—they are the ones who are guilty of gross negligence and dereliction of duty in preparing the UK for the problems it faces today.
	Anyone listening to this debate would recognise that there have been massive failures of Government policy, both in the decade to 2007 and in the Government's response to the crisis since. I do not know where the Chief Secretary to the Treasury stands on the issue of apologies, but her boss and her husband have given one, yet the Prime Minister still insists on saying that he has "nothing to apologise for"—that is how the British people will remember him. He will be remembered as the Prime Minister who brought destruction upon the economy, but who says that he has nothing to apologise for—not the failure of his regulatory system, which contributed to the global crisis in the first place; not his failure to manage our public finances, which meant that we went into this recession less well prepared than any other major economy; not his hubristic claim to have abolished boom and bust, which led many people to borrow money they could not afford, a decision that they regret now and will regret for the rest of their lives; not his grandstanding abroad when he should have been fixing the problems at home; and not his endless stream of ineffectual announcements, which are still not delivering today for the businesses and the households of this country.
	A Prime Minister who implemented a financial regulation system that has failed so catastrophically, who operated a model of economic growth based on unsustainable public debt, unsustainable global imbalances and unsustainable household debt and who cannot acknowledge those failures, even now, cannot be part of the solution. He is the problem, he is the past, and the sooner we move on to the future, the better for Britain.

Nick Herbert: I am grateful for this opportunity to raise the question of the proposed eco-town at Ford, which would lie in my constituency, and also, should it be given the go-ahead, in the constituency of my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb). It is a proposal for 5,000 new houses, and the size of that development means that the settlement would dwarf any of the existing settlements in my very rural constituency of Arundel and South Downs.
	I have three key concerns about this proposal, which are widely shared by the local community and by the elected local authorities. These concerns are: the impact on the countryside and the rural character of the area; whether we have adequate infrastructure to support development on this scale; and the democratic issue—whether there is consent on the matter, whether people are being properly consulted and who should decide where development should go.
	First, I shall talk about the impact on the countryside. I do not know whether the Minister has been to this part of the world, but Ford is a tiny village that lies in the Arun valley, below Arundel, which is a stunning location sited on the edge of the south downs. The Ford eco-town would be very close to an area of outstanding natural beauty and potentially a national park if the Government were to give it the go-ahead. Were an eco-town, effectively a new town of 5,000 houses, to be located at that site, it would clearly dwarf the existing hamlet of Ford and effectively join up small villages including Yapton and Climping. It would create what would amount to a new sprawl of development that would not just include the eco-town itself but begin to join the existing villages. At a stroke, open countryside would have been transformed into a suburban setting. That is unacceptable.
	I was also immensely concerned by how the developers sought to promote the development by arguing in their initial literature that it would be on a brownfield site. Yes, an airfield forms part of the site, but in fact 87 per cent. of the construction would be on greenfield land. The Government's own sustainability appraisal identified a number of key weaknesses in the Ford eco-town proposal, including the fact that the site is almost entirely greenfield and that there would be building on high-grade agricultural land—at a time, by the way, when we should probably be increasing food production in our country and worried about food security. The appraisal also stated that
	"although the area is not designated there is still a potential to change the setting and character of local villages"
	such as those that I have mentioned.
	The flood risk also needs to be addressed, and the Government acknowledged that, too, as a key weakness in their sustainability appraisal. The appraisal acknowledges that as a coastal area, Arun district is
	"likely to experience some of the most severe impacts due to climate change",
	and that there is a particular risk to ground water supplies. In an era when we have to be concerned about climate change, those should be serious concerns.
	The second category of objections that I wish to raise are those related to infrastructure. The developers originally told us that they would be able to spend £200 million on improving local infrastructure, of which, I should emphasise, we already have a significant deficit. We have very congested roads, including the A27, which is meant to be a coastal highway but is in fact a coastal car park. It is congested at key times, which I believe contributes significantly to the relative deprivation of Littlehampton and other coastal areas. Frankly, despite their proximity to London, the poor transport links of those areas have made them unable to share in the economic gains that other areas in the south-east have made in recent decades.
	It is that absence of adequate infrastructure, even with the current level of housing, that is of particular concern to local authorities. Clearly an additional 5,000 houses would create a huge challenge, for instance through the additional cars on the roads, even if it is supposed that a proportion of those cars would not be used because of the nature of the eco-town proposal. I make no general comment on eco-towns; I am making site-specific objections to the Ford proposal.
	The reality is that even in a city such as Brighton two thirds of households use cars, and that is in a city that is reputed to have exceptionally low car use. In my rural constituency there is 85 to 90 per cent. car ownership, and those who do not have cars are significantly disadvantaged. They cannot get about in rural West Sussex, even if they live in villages that are served by railway stations. I do not believe that the existence of a railway station at Ford—there is a question about whether it needs to be moved—is adequate mitigation against the loss of access that people would suffer if a new town were sited in the middle of the countryside, from where it is frankly unrealistic to expect them to be able to get around except by car. That is a major flaw in this particular scheme.
	The Arundel bypass has been awaited for decades. At one stage, it was about to be put in the Government's programme, but it is now a distant prospect, which will not even start until 2016. According to West Sussex county council, the indications are that the bypass is being pushed back, not forwards. There is a genuine question about whether the eco-town would be viable without a bypass around Arundel, given all the additional traffic that it would generate. There is also a conflict between the Government's advisers, who said that it would be wrong to build a bypass, and the developers, who originally said that one would and should be built and that they would provide money for it. Now they say that the eco-town does not depend on the bypass.
	It is impossible to conceive of siting a new settlement of 5,000 people without that upgrade in the key local road. It would mean major traffic congestion in the villages and in Arundel. That is a severe flaw in the scheme. Will the Government tell us whether plans for the Arundel bypass will be brought forward as part of the proposal for the eco-town?
	There is a further discrepancy in some of the developers' infrastructure promises. They say that they will produce a waste facility, but it will clearly rely on importing enormous amounts of waste from outside the proposed new settlement. The sustainability of that is questionable. Where will the waste come from? The proposal is out of kilter with West Sussex county council's existing programme. It has invested massively in a new waste treatment plant in the north of the county, to which the county's household and municipal waste will be taken. Another flaw therefore lies at the heart of the proposal. Lorry movements into the eco-town will pose a significant challenge to the concept of an environmentally friendly development.
	Let me deal with the democratic problem. The Government have effectively said that 11,500 houses are to be built in the Arun district in the next 20 years and that figure was recently increased. It is a huge number for a rural district to absorb. We can argue about whether it is a proper number—my view is that it is an unsustainably large number of houses to seek to build in the district without creating major implications for infrastructure and the rural character of the area. Nevertheless, if that number of houses is to be accommodated because the Government say so, the local authority should decide where they are located. Arun district council has the knowledge and experience and can assess local opinion to make the difficult decisions about where the houses should be. There is a further question about whether eco-town numbers would add to the 11,500 or be subtracted from them. We cannot get a clear answer from the Government, and I should be grateful if the Minister felt able to provide one this evening.
	There is huge public concern about the proposal. Thousands of people have marched and 10,000 have signed a petition to oppose the plans. The relevant local councils, all the parish councils, Arundel town council, the county council and, above all, Arun district council, oppose the scheme. Arun has to consult about it now as part of its local development framework process, but it initially expressed opposition to an eco-town. It should decide where development goes—I do not believe that it should be imposed on local people.
	I should be grateful if the Minister agreed to meet my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) and me to discuss those issues before any decision is made. I hope that she will understand that the local concern about the issue is very great indeed. I fear that a significant part of my constituency is about to be irrevocably transformed, and I cannot overestimate to the right hon. Lady the seriousness of the issue or how it is regarded locally.
	I would be very grateful if the right hon. Lady would agree to meet us. Indeed, we have written to ask whether that would be possible. However, I made an error in writing to her in omitting to mention that we briefly met the former Minister for Housing, the right hon. Member for Don Valley (Caroline Flint), which was most welcome. She made a brief visit down to the constituency, but we would nevertheless be extremely grateful if the current Minister for Housing agreed to meet us to discuss our concerns, in particular those about the latest assessment of the scheme's financial viability.
	I am extremely grateful for the opportunity to raise those concerns about the proposed development on behalf of almost every constituent who has written to me. There has been near unanimous opposition to the scheme. That is what I wish to relay to the Government.

Nick Gibb: I am grateful to my hon. Friend the Member for Arundel and South Downs (Nick Herbert) for securing this debate and for setting out the concerns about the proposed Ford eco-town so well.
	There is almost unanimous opposition to the proposal to build 5,000 homes on a pristine piece of Sussex countryside that links the beautiful historic town of Arundel to the River Arun and the spectacular marinas and beaches of the seaside town of Littlehampton in my constituency. People are angry about the proposal because it takes a top-down approach to planning, as my hon. Friend said, that completely circumvents the planning processes and the views and experience of local people and elected councillors.
	The draft planning policy statement breaks precedent by being site-specific, instead of setting out general principles. As the chairman of the South East England regional assembly has said:
	"The principle and location of eco-towns should be considered through normal development plan process, and the PPS and Eco-towns Programme should not supersede or over-ride local and regional plan-making."
	It is also clear from the sustainability appraisal that a development at Ford will be far from ecologically friendly or sustainable. In particular, it is clear to anyone living in that part of West Sussex that life without a car is extremely difficult, as my hon. Friend set out so well. The proposals are vague about how people could live at Ford without a car. We already suffer from an incomplete A27, which turns into a single-carriageway around Arundel and Worthing, frequently creating traffic congestion at points during the day.
	Arun district council has conducted two thorough select committee inquiries into the proposals. Among its many conclusions, the council has said that
	"without a by-pass for Arundel, major development in this location would cause significant congestion on the strategic and local highway network, and the Council does not accept that car reduction measures would be sufficient to mitigate this impact acceptably".
	Similarly, the A259, which runs from east to west in my constituency, is already congested for long periods at peak times. Cars from 5,000 houses would simply compound that problem. There is also a lack of clarity about whether the small railway station at Ford will be moved west and about whether it will have parking for 500 cars.
	Clearly some people will make money by turning agricultural land worth £4,000 an acre into building land worth £1 million an acre. As my hon. Friend said, 87 per cent. of the land is pristine, high-quality agricultural land. Even with that cash, however, we do not believe that it will be possible to deliver the three new schools, the social housing, the water recycling, the energy system, the new roads, the new bypass or the bunding for the river to protect against flooding that appear to have been promised at one time or another in this process. The financial viability study concluded at page 34 that
	"there are material uncertainties over the nature and cost of transport solutions required to meet Highways Agency requirements, small movements in the cost of which could adversely impact the viability of this proposal."
	People in my constituency are not nimbies. We understand the need for new housing, but in numbers and in locations that are sensitive to the environment in which we live and which are based on decisions taken locally by elected councillors sensitive to the views of the people whom they represent and sensitive to the fact that tourism is still a large employer in Littlehampton and Bognor Regis. That particular stretch of countryside is key to the beauty of the area and the attractiveness of both seaside towns for tourists. As the select committee concluded:
	"The Eco-Town would have a significant and damaging impact on the existing community, and would result in a substantial adverse change in the character of the District and this part of the coastal plain."
	A campaign has sprung up, entitled Communities Against the Ford Eco-town—CAFE—and my hon. Friend and I have been involved in it since the beginning. It has been highly effective in analysing the developers' proposals, the Government's planning policy statement and sustainability appraisal, and the financial viability study. On behalf of the whole community, I should like to thank Derek Waller, Terry Knott, Vicky Newman, Tom Sawyer and Susan West, among others, for the fantastic job that they have done in revealing all the many flaws in the proposals for an eco-town at Ford. The Minister's time would be well spent if she personally read their submissions and, as a consequence, dropped Ford from the list of eco-towns.

Margaret Beckett: I congratulate the hon. Member for Arundel and South Downs (Nick Herbert) on securing this debate, and I welcome the opportunity that it offers to set the record straight on a number of the points that he has raised. I should also say at the outset that I have received his request for a meeting with him and the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb), and I am happy to agree to that. I hope that that will give us an opportunity to explore these matters in continuing depth.
	First, I want to remind the House of the general principles behind eco-towns, before I turn to the specifics of the Ford proposal. By now, everyone should be familiar with the long-term need for more housing in the country. The most recent projections, produced only a few days ago by the UK statistics authority, serve only to underline and reinforce that case. The number of households is now predicted to grow to 27.8 million by 2031—an increase of 6.3 million even over the 2006 estimates. The House regularly debates the impact of the pressure on housing; we are all familiar with its effects. Families are unable to find suitable, affordable housing; young people are unable to take their first step on to the property ladder. We are also familiar with the need to build housing that responds to, and helps to, reduce the impact of climate change. Our housing currently makes up about a quarter of the UK's carbon emissions. That fact gets less publicity than some of the more glamorous venues, but it is infinitely more significant, particularly at the present time.
	There is no single answer to any of these challenges. We will need co-ordinated efforts to increase supply and to raise standards for all new housing. Although there is no single answer, we can accelerate innovation and promote best practice through exemplar projects such as eco-towns, showing what is possible and what is achievable. Eco-towns are just one of the options that local authorities can choose to adopt when planning to meet the challenges in their area.
	As my predecessors and I have repeatedly made clear, we are absolutely determined that only the best proposals will ultimately be taken forward. We have put in place a process for scrutinising and consulting on the proposals, and it is designed to be fair, rigorous and transparent. As requested, we have recently extended still further the deadline for consultation until 30 April, to give people even more chance to have their say. The intention is that the first eco-towns will be taken from drawing board to development over the next couple of years, with more to follow and up to 10 under development by 2020.
	Before I turn to the specifics of the Ford proposal, I want to make it very clear indeed that absolutely nothing that I say here tonight should be taken as any indication of the likely outcome for the proposal, or as pre-empting the shortlist. And of course, even were Ford or any of the proposals to make the final shortlist, they would still be subject to further testing through the planning process. That seems to be an aspect of the handling of this issue that is little understood. Ford is just one of a number of locations being considered for development of an eco-town. It is present in my mind, Mr. Deputy Speaker, that you have an interest in another of them.
	The proposal at Ford is for 5,000 homes, including 2,000 affordable homes, and it also proposes creating around 4,000 jobs, along with schools, green spaces, community and sports facilities. Such a proposal has the potential to make a significant contribution in an area where the shortage of affordable housing is particularly acute. In 2007-08, just 53 affordable housing units were completed in West Sussex—an increase, I might add, on 2006-07, but it is nowhere near adequate to meet local need.